The European Union has launched an anti-subsidy inquiry into the Electric Vehicles (EVs) coming from China. The announcement was made by the European Commission President Ursula von der Leyen during her State of the Union speech in Strasbourg, France.
Asserting that the EV sector is a “crucial industry for the clean economy with a huge potential for Europe, Ursula von der Leyen said that global markets are flooded with cheaper Chinese electric cars and huge state subsidies are provided to keep their price artificially low.
“This is distorting our market. And as we do not accept this from the inside, we do not accept this from the outside. So I can announce today that the Commission is launching an anti-subsidy investigation into electric vehicles coming from China,” the European Commission President said.
She added that “Europe is open to competition but not to a race to the bottom. We must defend ourselves against unfair practices.” The decision was met with applause from the EU Parliament.
Notably, of the new EVs sold in Europe this year, eight per cent were reportedly made by Chinese brands. This is a two per cent rise from 2022 and four per cent from 2021. The shares of Chinese EV producers have dropped after the EU announcement.
The decision was welcomed by France which has helmed the demand for the inquiry into Chinese EVs. French Europe Minister Laurence Boon said the move was important to protect the bloc’s market.
Leyen further underlined how European markets are bearing the brunt of unfair trade practices. “Competition is only true as long as it is fair. Too often, our companies are excluded from foreign markets or are victims of predatory practices. They are often undercut by competitors benefitting from huge state subsidies.”
She pointed out how the European solar industry has suffered owing to China’s unfair trade practices. This comes a day after the solar industry in Europe warned of bankruptcies over Chinese imports and sought a €100 million bailout.
“We have not forgotten how China’s unfair trade practices affected our solar industry. Many young businesses were pushed out by heavily subsidised Chinese competitors. Pioneering companies had to file for bankruptcy. Promising talents went searching for fortune abroad,” von der Leyen said.
SolarPower Europe, a group comprising solar sector industrialists, wrote to the European Commission on 11th September raising the red flag that soaring stockpiles and “fierce competition” among Chinese manufacturers to gain market share in EU had pushed down the prices of solar modules by over a quarter since the start of this year.
“It’s pretty severe,” CEO of SolarPower Europe Walburga Hemetsberger reportedly said.
China’s debt trap strategy and exploitative trade practices have prompted some severe reactions from the West which is a stakeholder in key Chinese projects in the bloc.
The same was reflected rather massively when Italian Prime Minister Giorgia Meloni reportedly hinted at leaving the Chinese Belt and Road Initiative (BRI).
Meanwhile, President of the European People’s Party (EPP), Mandred Weber welcomed the probe announced by von der Leyen saying, “We want a European Green Deal, not a Chinese one. We don’t want to see Chinese electric vehicles benefiting from our ambitious climate approach”.
