Europe investigates surge in Chinese electric car imports

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【Summary】The European Union is investigating China's state support for electric vehicle makers due to concerns over the impact on European auto manufacturers. The investigation follows a surge in imports of Chinese electric cars to Europe, which are supported by significant state subsidies. Chinese car manufacturers have gained a growing foothold in the European market, with exports quadrupling in the past five years. The investigation could result in tariffs on Chinese electric vehicle imports.

FutureCar Staff Sep 13, 2023 6:23 AM PT

Europe investigates surge in Chinese electric car imports

The European Union has initiated an investigation into China's support for electric vehicle (EV) manufacturers, citing concerns about the impact of soaring imports on European auto companies. European Commission President Ursula von der Leyen addressed the European Parliament, stating that while Europe welcomes competition, it does not support a "race to the bottom." Von der Leyen announced the launch of an anti-subsidy investigation into Chinese EVs, which she believes are flooding global markets with artificially low-priced cars due to significant state subsidies.

Currently, Europe imposes a 10% duty on cars imported from China, compared to the United States' duty of 27.5%. This discrepancy has allowed Chinese manufacturers to establish a substantial and rapidly growing presence in the European market. In the first half of this year alone, Chinese companies exported nearly 350,000 EVs to nine European countries, surpassing their total exports for the entire year of 2022. Over the past five years, EU imports of Chinese cars have quadrupled.

According to UBS, Chinese carmakers could potentially double their share of the global market from 17% to 33% by 2030, with European firms experiencing the greatest loss of market share. The European Commission's investigation may result in the imposition of tariffs on Chinese EV imports, causing concern among China's largest EV companies. Following von der Leyen's announcement, the stocks of BYD, Xpeng, and Nio, which are listed in Hong Kong, experienced declines.

BYD, China's largest EV manufacturer, plans to increase its number of dealer partners in Europe to 200 this year. The company aims to boost overseas sales to 250,000 vehicles in 2023, compared to 55,916 in 2022. Europe's auto industry is a significant employer, providing jobs for approximately 13 million people and accounting for about 7% of all employment. German economy minister Robert Habeck expressed support for the European Commission's investigation, emphasizing the importance of fair competition.

German and French industry executives have recently raised concerns about the growing threat posed by Chinese EVs, which are approximately 30% cheaper than their EU or US counterparts. BMW CEO Oliver Zipse warned that the EU's ban on new conventional vehicles from 2035, combined with competition from China, could lead to European automakers exiting the mass-market car production. Renault CEO Luca de Meo stated that Chinese rivals are "a generation ahead" of European manufacturers.

The European Automobile Manufacturers' Association (ACEA) welcomed von der Leyen's announcement as a recognition of the industry's asymmetric situation and distorted competition. ACEA director-general Sigrid de Vries emphasized the importance of a level playing field and reciprocal trade and market entry rules for fair and successful trade. The investigation by the European Commission aims to address these concerns and ensure fair competition in the automotive sector.

Source: CNN