The European Union has confirmed that it will impose additional tariffs on electric cars from China. This decision dashes the hopes of several automakers for a resolution and risks escalating the trade war.

The new import tariffs will come into effect on Friday and will initially apply for at least four months, announced the EU Commission. This announcement comes after negotiations with the Chinese government and lobbying by the German automotive industry and other interest groups failed to reach an agreement.

Last month, the EU Commission stated that the Chinese government subsidizes EV companies - including European car manufacturers that import electric cars to Europe - to a degree that undermines competition. Due to the subsidies, Chinese manufacturers could sell electric cars at lower prices than those made in Europe, which could lead to tariffs to protect the European industry.

European car manufacturers such as Volkswagen, BMW, Mercedes-Benz, and Stellantis are under pressure in China from domestic manufacturers like BYD and Geely, who also have growth plans for Europe.

However, Volkswagen and other German automotive giants have spoken out against the tariffs, fearing an escalation of the trade war. They argue that the tariffs could harm the European industry in the long term.

The new tariffs range between 17.4% and 37.6% depending on imports, subsidies, and cooperation with the investigation - in addition to an existing tariff of 10%. BYD, Geely, and SAIC will be subject to new tariffs of 17.4%, 19.9%, and 37.6%, respectively.

Several automobile manufacturers will have to pay tariffs averaging 20.8%. Tesla, which has hinted at raising prices due to the tariffs, could receive an adjusted rate. This decision will be made if and when the tariffs become final in November. After that, they would be in effect for five years.

Overall, the tariffs for some automobile manufacturers will be slightly lower than originally announced, according to the EU Commission. The executive has adjusted the tariffs after receiving additional information from the affected companies following the investigation.