Europe wants to put obstacles in the way of Chinese electric cars

Pressed by France, the President of the European Commission, Ursula von der Leyen, announced the opening of an investigation into Chinese subsidies for electric cars. This gesture was welcomed by European manufacturers who denounce unfair competition.

“Global markets are now flooded with cheap Chinese electric cars, the price of which is kept artificially low by massive government subsidies”, said Ursula von der Leyen in a speech to the European Parliament in Strasbourg. This statement comes in a context where China has taken a step ahead of Europe in the field of electric cars.

Chinese electric cars soon to be more expensive in Europe?

If, at the end of its investigation, the Commission finds infringements of commercial rules, it could impose punitive tariffs on Chinese vehiclesat the risk of triggering a trade war with Beijing. “Europe is open to competition. Not a race to the bottom“, launched the German official, receiving loud applause.

Immediately after the announcement, a senior Chinese official protested, calling the action “pure protectionism” in a message on X (formerly Twitter). He also pointed out that many EU member countries were subsidizing their electric vehicle industries.

According to info from @ACEA_automany EU members subsidize their #ElectricVehicle industries. In what position is @EU_Commission to launch anti-subsidy investigation into electric vehicles from #China? This is nothing but sheer protectionism. pic.twitter.com/h8N3lk2PSD

— 王鲁彤 Wang Lutong (@WangLutongMFA) September 13, 2023

This investigation was well received by France, which in recent months has pleaded in favor of a firmer Europe in the face of practices it considers protectionist on the part of Beijing. Germany, which is traditionally more cautious due to its trade ties with Chinealso supported this initiative alongside France.

If Chinese subsidies “do not comply with the rules of the World Trade Organization, Europe must be able to respond”declared French Minister of the Economy Bruno Le Maire, welcoming “a very good decision” de Mme von der Leyen. “We want fair cooperation between China and Europe. It is not and cannot be weakness”he insisted.

His German counterpart, Robert Habeck, described the decision as “overall positive”stressing that it was not a question of excluding efficient and affordable vehicles from the European market, but of checking whether there were hidden subsidies, direct or indirect, conferring an unfair competitive advantage.

Europe wants to dialogue with China

Ursula von der Leyen argued in favor of a « dialogue » with China, emphasizing that it was essential to defend against unfair practices while continuing dialogue with Beijing. Trade Commissioner Valdis Dombrovskis announced that he will visit China next week to discuss trade and economic opportunities and challenges.

For its part, as we have been announcing to you for several months on Auto Plus, the French government is currently preparing a reform of subsidies for electric vehicles in France, which should soon be conditional on an “environmental score” aimed at limiting imports from China.

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