The EU Commission’s investigation into Chinese electric vehicles has provisionally concluded that they “benefit from unfair subsidies” and are “causing a threat of economic harm to EU producers”. Countervailing duties will be temporarily imposed on imports.
The duties on the three Chinese producers included in the sample will be: BYD of 17.4%; Geely: 20%; SAIC 38.1%. Other producers who cooperated in the investigation will be subject to a 21% duty, while it will be 38.1% for those who did not cooperate.
The provisional findings of the EU’s anti-subsidy investigation indicate that “the entire value chain of battery electric vehicles benefits heavily from unfair subsidies in China and that the influx of subsidized Chinese imports at artificially low prices therefore poses a threat of clearly foreseeable and imminent injury to the EU industry”, reports the community executive.
The Commission’s investigation was launched on 4 October and must be concluded within a maximum of 13 months from its opening. Provisional countervailing duties can be published by the Commission within 9 months of opening, i.e. by 4 July.
Definitive measures will have to be imposed within 4 months of the imposition of provisional duties. Following a substantiated request one of the manufacturers in China, Tesla, may receive an individually calculated duty rate at the final stage.
Any other company producing in China not selected in the final sample and wishing to have its particular situation investigated may request an accelerated review, in line with the Basic Anti-Subsidy Regulation, immediately after the imposition of the definitive measures (i.e. 13 months after opening). The deadline for completing the review is 9 months.
Information on the expected levels of provisional duties is provided to all interested parties (including Union producers, importers and exporters and their representative associations, Chinese exporting producers and their representative associations, and the country of origin and (i.e. China), and to EU Member States before such measures are imposed, in line with the procedures established by the EU Basic Anti-Subsidy Regulation.
“We have achieved a key step in our investigation into Chinese battery electric vehicles by making public the provisional duties we intend to impose. Our goal is not to close the European market to Chinese electric vehicles, but to ensure that competition is fair,” he said. said the Vice President of the European Commission Valdis Dombrovskis on X.
According to what has been learned from a European official, in the absence of action on Chinese subsidies for imports of Chinese electric vehicles, the European Commission’s investigation has highlighted a rrisk for 2.5 million direct jobs and 10.3 million indirect jobs, as a consequence of the competition with domestic producers of the supply which is believed to be subsidized by China.
From what emerged between 2020 and 2023, the market share of the EU industry continuously decreased, going from 68.9% to 59.9%. Meanwhile, the market share of Chinese imports rose from 3.9% to 25%.
The EU “has ignored the facts and the rules of the WTO, the repeated strong Chinese objections, the appeals and dissuasion of governments and industries of several European states”. The Beijing Ministry of Commerceor, commenting on the duties on electric cars decided by Brussels, contested the EU conclusions, “without factual and legal basis” which ignore “the objective fact that China’s advantages in electric vehicles derive from open competition”.
China urges the EU “to immediately correct its wrong practices”, reserving the right to “resolutely adopt all necessary measures” to protect Chinese companies. China “is highly concerned and dissatisfied and the Chinese industry is deeply disappointed by this, resolutely opposing it”, we read in a note, which contests the failure to apply the rules of the World Trade Organization (WTO) and “the full cooperation of Chinese companies in relevant investigations” amid accusations that the EU had “artificially structured and exaggerated so-called ‘subsidy’ projects and abused the available facts rule”. Cutting the “highly anomalous” part of subsidies is a pure protectionist act, which creates and intensifies trade frictions, and actually undermines fair competition in the name of maintaining fair competition. The move decided by the European side “not only damages the legitimate rights and interests of the Chinese electric vehicle industry, but is also destined to disrupt and distort the global automotive industry and supply chain, including the EU” .
The European Commission “holds high the banner of green development with one hand and wields the stick of ‘protectionism’ with the other, politicizing and weaponizing economic and trade issues. This is inconsistent with the spirit of consensus among China’s leaders and Europeans on strengthening cooperation, and will influence the atmosphere of bilateral economic and trade cooperation.” And it will not be conducive to the interests of European consumers themselves which “will also undermine the EU’s green transformation and global cooperation on climate change”. China urges “to immediately correct wrong practices, effectively implement the important consensus reached in the recent tripartite meeting between China, France and EU leaders, and properly manage economic and trade frictions through dialogue and consultation.” China, the note concludes, “will pay close attention to the progress made by the EU and will resolutely adopt all necessary measures to firmly defend the rights and legitimate interests of Chinese companies”.
The Chinese Chamber of Commerce at the EU he expressed “shock, serious disappointment and profound dissatisfaction” at the provisional countervailing duties announced by the Commission on electric vehicles made in China. The fears, we read in a note, are linked to the fact that the move could “intensify commercial frictions between Beijing and Brussels, negatively impacting economic and commercial relations” between the two parties.
The EU hits its own interests with duties on imports of electric vehicles made in China. This is the comment of the spokesperson of the Foreign Ministry Lin Jian on the measures that, according to the Financial Times, Brussels should announce today. Beijing will take all measures to “firmly defend its legitimate rights and interests” on the possibility of tariffs of up to 25%. “We urge the EU to uphold its commitment to support free trade, oppose protectionism and work together with China to safeguard overall bilateral economic and trade cooperation,” Lin added. EU tariffs would also undermine “the stability of global automotive production and supply chain”, added Lin, launching an appeal “in defense of the overall interests of China-EU economic and trade cooperation”.
The European automotive sector is facing the existential threat linked to the energy transition with the transition from combustion engines to those powered by alternative energies, especially electric ones in which China has a global leadership role. Last year, Brussels launched an investigation into Chinese subsidies for the production of electric vehicles, in a bid to crack down on alleged unfair practices undermining European carmakers.
The electric vehicle stalemate comes amid growing trade tensions between Beijing and Western countries, which are investing billions in the energy transition and accusing the Dragon of unfair competition in everything from wind turbines to solar panels.
The president of the EU Commission Ursula von der Leyen had anticipated that Brussels was planning “targeted” action on the matter, after the United States had quadrupled the duties on Chinese electric vehicles, bringing them to 100%.
Beijing is the largest car exporter in the world and Europe is a critical reference market: EU imports of electric vehicles from China have increased rapidly from 57,000 in 2020 to around 437,000 in 2023, according to estimates from the Peterson Institute for International Economics.
Rhodium Group, however, estimated that in the same period the value of the flows increased from 1.6 billion to 11.5 billion dollars.
“The European Commission’s punitive duties impact German companies and their flagship products.” He says this about X the German Minister of Transport Volker Wissing, commenting on the European duties affecting electric cars from China. “Vehicles must become cheaper through greater competition, open markets and significantly better location conditions in the EU, not through trade wars and market foreclosures.”
The Minister of Business and Made in Italy, Adolfo Urso, in his speech at the Confcommercio assembly. : “I welcome with satisfaction the announcement that the EU Commission made today of duties on the entry of Chinese electric cars into Europe to protect European production in the full awareness that we also have: the possibility of reaffirming the Italian automotive industry in Italy , one of the driving sectors of our country’s industrial development that they absolutely do not want to give up.”
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