The automaker estimates its struggling China business will cost $5 billion, but it isn't giving up on the country yet.

Chinese EV makers BYD, Geely, and SAIC contested EU's import duties at Court of Justice. Tesla excluded from tariffs, gaining only 7.8% tax.

Tesla is challenging the European Union in court over the tariffs imposed on its Chinese electric vehicles despite getting

The European automotive industry faces rising tensions as BMW and Tesla Shanghai file lawsuits against the European Commission

Tesla's legal challenge is in response to the EU introducing tariffs at the end of October of 7.8 percent on Tesla's China-made vehicles. The bloc has also set tariffs of up to 35.3 percent on other China-made EVs. The new tariffs come on top of a 10 percent standard import tariff that was already in place for electric vehicle imports into the EU.

Tesla is taking legal action against the European Union (EU) over tariffs imposed on Chinese-made electric vehicles (EVs), despite being granted the lowest rate among car manufactures importing into the region.

Manufacturers in China have found workarounds, and experts say that could be a lesson for U.S. policymakers. Export data released last week show EV exports from China to the European Union increased 8.3% year-over-year, a reversal of the approximately 40% and 25% plunges the measurement took in October and November, respectively.

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Automakers are pushing back against the application of the tariffs imposed by the European Union on Chinese-built electric vehicles, which came into effect in late October year. Not surprisingly, the first action came from Chinese