EU discovers government subsidies for Chinese electric vehicles arriving in Europe

European Commission assured that he has evidence that the Chinese government is subsidizing electric vehicles exported to Europe through “direct funds transfer” and other mechanisms. The information was published by Bloomberg and Reuters.

The commission is investigating whether electric vehicles made in China receive subsidies unfair. Possible solutions could include tariffs to protect EU producers. The investigation is due to conclude in November, although the EU may impose preliminary rates in July.

The commission said it would begin customs records Chinese electric vehicle imports on Thursday, meaning they could suffer retroactive tariffs from now on if an EU trade investigation later concludes they receive unfair subsidies.

The EU-China Chamber of Commerce said it was disappointed by the move and that the increase in imports reflected growing European demand for electric vehicles.

On Tuesday, the commission released a document saying it has sufficient evidence that Chinese electric cars are subsidized and thatImports increased 14% year on year. since the investigation officially began in October.

The commission said it could not estimate the amount of possible retroactive tariffs.

Chinese car manufacturers, including BYD and MG from SAICare targeting Europe with a range of competitively priced electric vehicles, putting pressure on mass market manufacturers such as Stellantis Youl Volkswagen group of companies.

BYD, which last year overtook Tesla as the world’s largest maker of electrified cars, said in December it would build a car plant in Hungary to boost sales in Europe.

EU tests

The Commission said it had evidence that EU imports were subsidized, although it did not list specific cases. Such subsidies include:

* Direct transfer of funds and possible direct transfers of obligations and funds

* Government revenues “forgiven or not collected”

*Government supply of goods or services “for less than adequate remuneration”

The Commission argued that China’s exports amounted to “critical circumstances” through “mass imports in a relatively short time”. From October 2023 to January 2024, 177,839 units were imported, an 11% increase over the investigation period from October 2022 to September 2023.

Imports rose 14% year on year between October and January, the commission said.

According to the commission, if Chinese imports continue at the same pace, EU automakers could face decline in sales and decline in production levels. This could “negatively impact the employment and overall production of union manufacturers,” the commission said.

In recent investigations into other sectors such as electric bicycles and fiber optic cables, the EU found that subsidy margins ranged from 4 to 17%

.

The study is part wider EU efforts to protect supply lines and bring manufacturing closer to home, especially in key sectors such as semiconductors and pharmaceuticals.

The announcement tested already fragile relations with Beijing, which subsequently launched its own investigation. anti-dumping on brandy imported from the EU, the measure is seen as retaliation against France, which supported research into electric vehicles.