Electric cars from China too cheap? European Commission launches investigation

Electric car brands

NIO, XPENG, BYD, Aiways, Hongqi, JAC, MG, Ora and Seres, they are all examples of electric car brands investing heavily in the European market. The European Commission finds that worrisome. EC President Ursula von der Leyen bites off hard during a speech on the State of the Union 2023′.

Her speech reads:

Honourable Members,

From wind to steel, from batteries to electric vehicles, our ambition is crystal clear: the future of our clean industry must be “made in Europe.

Thus we show that with the European Green Deal we remain on track, remain ambitious, maintain our strategy for growth and continue to work for a fair and equitable transition! So with an equitable outcome for future generations – to live on a healthy planet.

And a just course for everyone affected – with decent work and the solemn promise to leave no one behind. Just think about manufacturing jobs and competitiveness: an extremely hot topic.

Our industry and technology companies love competition. They know that global competition is good for business. And ensures that in Europe, good jobs are not only created but also preserved.

True competition does exist only if it is also fair. Too often, our companies are excluded from foreign markets or victimized by predatory behavior.

They are often undercut by competitors who receive sky-high state subsidies. We have not forgotten how China’s unfair trade practices have hurt our solar panel industry.

A lot of young companies were squeezed out of the market by heavily subsidized Chinese competitors. Pioneering companies went out of business. Promising talented people moved away to try their luck elsewhere. This is why a fair global economy is so important, the impact on lives and livelihoods is significant. Entire industries and communities depend on it.

So we need to be clear about the risks we face. Take electric vehicles, for example. That sector is crucial to a clean economy, and has enormous potential in Europe.

But worldwide markets are now flooded with cheaper Chinese electric cars. The price of those cars is kept artificially low with huge state subsidies. This distorts our market.

And since we don’t tolerate that from within, we don’t tolerate that from without. So today I can announce that the Commission is launching an anti-subsidy investigation into electric cars from China. Europe is open to competition. But not for a “race to the bottom.

Ursula von der Leyen

Pithy speech

That’s what you call a spirited speech. When the anti-subsidy study should be completed is not clear at this time. Von der Leyen does stress that the investigation will be conducted in a friendly manner. Europe does demand that Chinese automakers disclose how they get cars so cheap. Because if cars enter the market in advance with subsidies, it is unfair to European brands, the EC believes. In other words, they are very concerned because China is gaining market share at an extremely fast pace in the field of BEVs.