United Kingdom: The European Union has launched a probe into China’s subsidies for electric vehicle makers due to concerns that the payments are harming European companies.
“Global markets are now flooded with cheaper Chinese electric cars, and their prices are kept artificially low by huge state subsidies. This is distorting our market,” European Commission President Ms. Ursula von der Leyen told EU lawmakers.
“As we do not accept this distortion from the inside in our market, we do not accept this from the outside. So, I can announce today that the commission is launching an anti-subsidy investigation into electric vehicles coming from China,” Ms. von der Leyen added.
The Commission will have up to 13 months to assess whether to impose tariffs above the standard 10 percent EU rate for cars. The anti-subsidy investigation further covers battery-powered cars from China, including non-Chinese brands made there, such as Tesla, Renault, and BMW. Ms. von der Leyen remarked that Europe was open to competition but “not for a race to the bottom.”
China has become the biggest market for electric vehicles by investing billions of dollars in subsidies to get an early lead in what is seen as a promising industry. Global automakers face growing competition in their home regions from Chinese brands that are taking market share.
European car makers hailed the EU’s investigation as a “positive signal.” “The European Commission is recognizing the increasingly asymmetric situation our industry is faced with and is giving urgent consideration to distorted competition in our sector,” Mr. Sigrid de Vries, director general of the European Automobile Manufacturers Association, noted.
The Chinese Chamber of Commerce to the EU said it was very concerned and opposed to the investigation’s launch and that the sector’s competitive advantage was not due to subsidies. Tensions between China and the EU have been growing, partly due to Beijing’s closer ties with Moscow after Russia’s invasion of Ukraine.
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