The EU Commission accuses the Chinese state of distorting competition with subsidies for electric cars. An investigation has now begun. In Germany, people fear consequences for their own industry.
Are Chinese electric cars so cheap because they benefit from government subsidies? This is exactly what the EU Commission is dealing with from today onwards. It has launched an investigation into government subsidies for Chinese electric cars. There is sufficient evidence that European manufacturers could be harmed by Chinese state resources, the Commission said.
According to the information, Chinese electric cars are around 20 percent cheaper than models manufactured in the EU. “The price of these cars is artificially depressed by huge state subsidies – this distorts our market,” said Commission President Ursula von der Leyen back in September. That is not acceptable.
Punitive tariffs could follow
The world markets are being flooded with cheaper Chinese electric cars, von der Leyen continued. According to experts, the share of Chinese electric vehicles could rise from the current eight to 15 percent in 2025 – also because of the low prices.
The investigation should determine whether electric cars in China benefit from illegal subsidies, said a spokesman for the EU Commission. An anti-subsidy investigation can lead, for example, to punitive tariffs being imposed. The EU has already introduced anti-dumping duties on solar panels from China, among other things.
China criticizes investigations
In Germany, experts are skeptical about the EU Commission’s move – there are fears here that the German car industry, which sells around 30 to 40 percent of its cars on the Chinese market, could be the target of retaliation. The director of the Center Automotive Research, Ferdinand Dudenhöffer, expressed this concern after the investigation was announced.
The Ministry of Commerce in Beijing criticized the start of the investigation. A spokesman explained that the EU is acting on purely subjective assumptions and not according to the rules of the World Trade Organization. “The EU required China to conduct negotiations in a very short time and failed to provide documents for the negotiations, which seriously violates the rights of the Chinese side,” the authority added. China will closely monitor the investigation and protect the rights of its companies, the spokesman said.