Elon Musk and Brussels are squaring off again as Tesla (TSLA) takes the European Union (EU) to court over tariffs on electric vehicles made in China.
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Tesla joins BMW and a number of Chinese EV makers in seeking to overturn the bloc’s tariff regime, which was brought in last year.
In October, the EU imposed a tariff of 7.8% on Tesla vehicles made in China, and up to 35.3% on Chinese EV makers, in addition to the standard 10% industry import tax.
The case was lodged by Tesla’s Shanghai arm at the Court of Justice of the European Union (CJEU), according to a filing on the court’s website on Monday, January 27th, with no further details being supplied.
“We’re ready,” the European Commission’s trade spokesperson Olof Gill said last week, responding to the challenges already filed by BMW, BYD (BYDDY), SAIC and Volvo-owner Geely (GELYF). “We’re a rules-based club here in the EU. If they want to take us to court, they can take us to court.”
About a fifth of EV cars sold in the EU are made in China, but Tesla saw sales in the region down 13% last year, with some European buyers potentially put off by Musk’s activism.
Musk and EU Square Off
It marks the latest escalation in Musk’s feud with the EU, which earlier this month ratcheted up its investigation of his X social media platform over content moderation.
Building on its probe that began in December 2023 under the powerful Digital Services Act (DSA), the EU wants X to provide by February 15th internal documentation about its recommender system, which makes content suggestions to users.
“Today we are taking further steps to shed light on the compliance of X’s recommender systems with the obligations under the DSA,” EU digital chief Henna Virkkunen said in a statement.
Meanwhile, Musk, a strong supporter of President Trump, has strongly criticized EU technology regulation and given his backing to Germany’s AfD, putting him squarely at odds with the European establishment.
Tesla and tariffs are a running theme. Last week, TSLA began hiking prices across all its cars in Canada, just days after U.S. President Donald Trump said he would impose punitive tariffs on imports from the country.
Is Tesla Stock a Good Buy?
Wall Street has a Hold consensus rating based on 12 Buys, 10 Holds, and eight Sell ratings. Also, the average TSLA price target of $345.11 implies around 15% downside from current levels.
