Tesla to Raise Model 3 Prices in Europe Amidst Potential Tariff Increases

Tesla (NASDAQ:TSLA) has announced that it will increase the price of its Model 3 in Europe, effective July 1, 2024. The price increase is attributed to potential higher tariffs on imported electric cars from China, as proposed by the European Union (EU).

Notices of the price hike have been posted on Tesla’s websites in several European countries, including Germany, where the company operates a factory, and Hungary. While the exact price increase for the Model 3, currently priced at $44,000 in Germany, has not been disclosed, the company has confirmed the adjustment.

The European Commission, the EU’s executive body, recently unveiled plans to increase tariffs on vehicles imported from China to the 27-nation bloc. This decision comes after an EU investigation that identified unfair subsidies within China’s battery-electric vehicle industry. Unless resolved, provisional duties will be implemented on July 4, 2024, with definitive measures expected four months later.

Chinese electric vehicles have been subject to tariffs of up to 38.1%. Tesla, which exports Model 3 cars from its Shanghai Gigafactory to Europe, cooperated with the EU investigation and initially faced a lower tariff of 21%. The company may receive an individually calculated duty rate when definitive tariffs are imposed in November.

Tesla’s Shanghai Gigafactory is one of the company’s largest production facilities. In 2023, the factory delivered 947,000 vehicles, with a substantial portion exported outside China.