Tesla could come out on top after the EU cracks down on Chinese EVs

• Europe is cracking down on EVs coming from China, imposing new tariffs on imports.

• Tesla is reportedly lobbying for a lower rate of tariffs.

• The European Commission has confirmed it is exploring Tesla's request.

Elon Musk might be about to outmaneuver Tesla's Chinese EV rivals in Europe.

The European Commission confirmed Wednesday that Tesla — which manufactures EVs for the European market at its Shanghai gigafactory — may receive its own special rate of tariffs.

The Musk-run automaker had lobbied for a lower tariff rate than its Chinese rivals, according to Bloomberg, pointing out that it had received fewer state subsidies from the Chinese government than companies like BYD and Geely.

A spokesperson for the European Commission told CNBC looking at the subsidies Tesla has received in China "may lead indeed to different level of countervailing duties." It's unclear if Tesla would benefit overall as the tariffs will likely be relative to the subsidies it has received.

It comes as Tesla warns customers in Europe that it may have to hike prices of the Model 3, which is manufactured in China, as a result of the tariffs.

Business Insider contacted Tesla and the European Commission for further comment but didn't immediately hear back.

The EV giant does have a gigafactory in Germany, where it builds Model Ys, but it imports its Model 3 sedan into the EU from China.

Tesla imported more EVs into Europe than anyone else last year, shipping in 171,000 cars compared to Chinese rival SAIC Motor's 118,000, according to HSBC data reported by Bloomberg.

The EU announced a new barrage of taxes on China-made electric vehicles on Wednesday, after provisionally concluding that the amount of money China has poured into its EV industry gave China-based companies an unfair advantage.

Warren Buffett-backed BYD, which briefly overtook Tesla as the world's largest EV producer earlier this year, was hit with a 17.4% import tax, while Geely and SAIC Motor were hit with rates of 20% and 38.1%, respectively.

Other China-based firms cooperating with the EU's investigation will face a 21% duty, while those that refused, will be hit with a 38% tariff. These new tariffs are on top of the EU's existing 10% duty on imported EVs.

Tesla has been manufacturing in its Shanghai gigafactory since 2019, and has benefited from Chinese government subsidies meant to boost the country's EV market.

In 2022, it received the second highest amount of subsidies for the production of its EVs behind BYD, according to Bloomberg analysis of industry data.

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