The Chinese Ministry of Commerce has strongly criticized the European Union’s decision to investigate state subsidies that allow Chinese-made electric vehicles (EVs) to be sold in Europe at lower prices. This investigation could potentially result in the EU imposing tariffs on EV imports from China.
Beijing has labeled the probe as “protectionist” and has defended the competitive advantage of the Chinese EV sector, stating that it is not solely due to subsidies. The Chinese Ministry of Commerce expressed concerns that the investigation would disrupt and distort the global automotive industry, negatively impacting China-EU economic and trade relations.
Several EU member states, including France, had advocated for such an investigation for several months, while Germany’s influential automotive industry remains uncertain about the potential outcomes. Mercedes-Benz, in partnership with Chinese automaker Geely, emphasized that protectionist measures are counterproductive. Bosch, the world’s largest automotive supplier, warned against a race for punitive tariffs and trade barriers, emphasizing that such actions would result in no winners. Stellantis, on the other hand, welcomed fair competition that drives innovation and performance.
Chinese EV brands have been steadily increasing their market share in Europe, nearly doubling it from 3.4% in the first seven months of 2022 to 6.7% in the same period in 2023. However, they are still trailing behind South Korean, US-based, and European manufacturers in the European EV market. EU officials believe that Chinese-made EVs are undercutting the prices of local EVs by around 20%, putting pressure on European automakers to produce more affordable electric vehicles. To address this, European manufacturers are planning to introduce smaller and more affordable EV models in the near future.