Tesla's Strategic Moves Amid EU Tariff Decisions Propel Its Stock Performance Up 22%

• Tesla faces a 9% tariff for its cars produced in China.
• The tariffs are aimed at countering unfair competitive advantages conferred by Chinese state subsidies.
• Tesla's stock has bounced back, with a noticeable rise in share price, indicating investor confidence.

The European Commission's recent decision on tariffs for Chinese-made electric vehicles (EVs) has sparked significant discussion in the automotive and economic sectors.

This decision notably affects Tesla Inc TSLA, as its cars made in China are now subject to a 9% tariff when exported to the European Union (EU). This is much lower than the average 21.3% tariff for other cooperating companies and the 36.3% for non-cooperating firms.

Tesla's lower tariff results from its proactive engagement during the EU's investigation into Chinese subsidies. By submitting an individual petition, Tesla secured a better tariff rate, illustrating the nuanced outcomes under EU trade laws.

In contrast, other major Chinese EV makers like BYD will face a 17% tariff, reflecting less favorable terms from the EU.

These tariffs are part of the EU's strategy to tackle what it sees as unfair competition due to Chinese subsidies, which include state support like below-cost batteries and direct incentives.

The investigation found that BYD and Tesla benefited from significant subsidies, $3.7 billion and $426 million, respectively, enhancing their production in China.

For now, the EU has deferred interim duties on Chinese EV imports until the final decision in October to avoid disrupting European EV manufacturers' competitive balance.

Looking at Tesla’s financial performance, the company's stock has shown both resilience and volatility due to corporate and regulatory changes.

After dropping below $200, Tesla’s share price rebounded by 22% and now sits above this important level. This bounce back shows strong market confidence in Tesla's value and stability despite external challenges.

Tesla's stock has been moving within a range, from a low of $100 in January 2023 to a high of $300 in July 2023, indicating a period of consolidation.

Investors are watching closely for a breakout that could suggest an uptrend. A move above $300 could signal future gains and potentially revisit the all-time high of $441 from November 2021.

After the closing bell on Tuesday, August 20, the stock closed at $221.10, trading down by 0.73%.

This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.