EU begins anti-subsidy probe into Chinese electric cars

 

BRUSSELS – The European Union has officially begun an investigation into Chinese subsidies for electric vehicle makers, which could lead to punitive duties being imposed on imports to the bloc.

European Commission President Ursula von der Leyen said last month that an anti-subsidy investigation would be opened as she accused Beijing of flooding the global market with cheap electric cars.

“Their price is kept artificially low by huge state subsidies. This is distorting our market,” she charged.

The probe could potentially lead to punitive duties being imposed on imports to the EU.

Chinese electric cars are typically around 20% cheaper than models manufactured in the 27-member union, the European Commission said, adding that China’s share of EVs sold in the EU could reach 15% by 2025.

In Germany, there are fears that its auto industry could suffer blowback from the investigation.

Germany automakers sold 30% to 40% of their cars on the Chinese market, said the director of the Center for Automotive Research, Ferdinand Dudenhöffer. In his opinion, German companies would be the first target of countermeasures by Beijing.

China’s Commerce Ministry has blasted the EU probe as “naked protectionist behaviour” that will have “a negative impact” on relations.

The formal launch of the EU investigation came in an announcement in the Official Journal of the European Union on Wednesday.

The EU has already introduced anti-dumping duties on solar panels from China.