Date: September 14, 2023. — China has expressed its disapproval of the European Union’s recent investigation into alleged unfair subsidies provided by the Chinese government to its electric vehicle (EV) industry. The European Commission initiated the probe last week, citing concerns of possible market distortions and violations of trade agreements.
Chinese officials called the investigation “unjustified and politically motivated.” They stated that it could harm the growing global electric vehicle market and disrupt trade relations between China and the EU. The Chinese Ministry of Commerce issued a statement condemning the EU’s actions. They asserted that China has always complied with international trade rules.
The investigation derives from months of French pressure to crack down on insurgent Chinese automakers. It might pave the path for the EU to levy further taxes on Chinese vehicles. However, it exposes European automakers, particularly German companies with a significant presence in China, to retaliation from Beijing.
The investigation will be at the top of the agenda at a high-level EU-China economic and trade dialogue on September 25. This dialogue precedes a bilateral summit scheduled for later this year. The China Passenger Car Association has expressed its opposition to the investigation. They claim that it was founded on an incorrect basis.
“China’s new energy vehicle exports are seeing stronger volumes. This is not because of huge state subsidies. It’s due to the highly competitive China industrial supply chain from strong domestic market competition,” Cui Dongshu, the association’s secretary-general, remarked on his personal WeChat account. He added that Chinese cars sold to Europe are typically priced roughly double what they are in mainland Chinese marketplaces.
With almost 1.3 million units sold last year, China is the world’s largest market for electric vehicles. By 2025, the country hopes to have 20% of its car sales be electric.
The outcome of this probe could have far-reaching implications for the future of electric vehicle trade and cooperation between these economic giants.