European Commission launches anti-subsidy investigation into Chinese electric cars
Commission warns of ‘distorted market’ as state subsidies mean Chinese firms can undercut European vehicles
The European Commission has launched an investigation into the subsidies handed to Chinese carmakers by the state, warning of unfair competition against European manufacturers.
There’s a growing emergence of Chinese car firms looking to enter the European market, often being incentivised to do so by the Chinese state. As a result, these electric cars often undercut the price of cars from elsewhere and are set to grow in popularity as a result.
With many European car firms worried about being priced out of the market, the European Commission president Ursula von der Leyen has today (September 13) announced an anti-subsidy investigation into Chinese electric cars.
In her annual State of the European Union address, von der Leyen said: “Global markets are now flooded with cheaper Chinese electric cars. And their price is kept artificially low by huge state subsidies. This is distorting our market, and as we do not accept this distortion from the inside of our market, we do not accept it from the outside.
“So I can announce today that the Commission is launching an anti-subsidy investigation into electric vehicles coming from China. Europe is open to competition, but not for a race to the bottom. We must defend ourselves against unfair practices.”
What the probe will entail remains unclear, however, it could see levies imposed against Chinese electric cars to make the prices more closely aligned with European cars.
Despite the warning, von der Leyen added: “But equally it’s vital to keep open lines of communication and dialogue in China, because there are topics where we can and have to cooperate. De-risk not decouple, this will be my approach with the Chinese leadership at the EU China summit later this year.
The range of Chinese car brands currently operating in Europe is vast, including BYD, GWM Ora, NOP and Xpeng to name just a handful, with many more planned to enter the region in the coming years.
The boss of Peugeot and Vauxhall owner Stellantis, Carlos Tavares, has previously warned of a ‘terrible fight’ with Chinese car firms owing to the ‘significant’ difference in price between models from Europe and those in China.
