Tesla Inc (NASDAQ:TSLA) shares rose after the European Union proposed cutting its planned tariffs on electric vehicles the US carmaker imports from its factory in China.
Having been set at 20.8% last month, the EU's executive body today proposed slashing the tariff to a new rate of 9%.
This comes in addition to an existing 10% import levy on battery electric vehicles, bringing Tesla’s rate up to 19%.
It said Tesla had requested an “individual examination” to determine what the tariff should be, based on the specific subsidies the company received from the Chinese.
Other Chinese manufacturers will face tariffs as high as 36.3%.
Tesla shares are up 0.9% in pre-market trading.
The Chinese Chamber of Commerce to the EU said it wanted to express its "strong dissatisfaction and firm opposition to the EC’s protectionist approach" and that the EC’s "unfair use of trade tools to hinder free trade in electric vehicles, along with this protectionist approach, will ultimately weaken the resilience of the European electric vehicle industry" and "will exacerbate trade tensions between China and the EU".
Rahul Bhushan, managing director of the European arm of Cathie Wood's ARK Invest, says the potential reduction in tariffs is "a significant win for Tesla and the broader European electric vehicle market".