President von der Leyen's 2023 State of the Union Address. © European Union 2023 – Source: EP
Little by little, Chinese electric cars are gaining ground. For example, it is estimated that in Europe, electric vehicles manufactured in China today have a market share of 8%. But this share could increase to 15% by 2025. Fearing illegal subsidies that would allow the export of cheaper electric cars, the European Commission opened an investigation at the end of 2023.
“The investigation will first determine whether the BEV value chains produced in China benefit from illegal subsidies and whether these subsidies cause or threaten to cause economic harm to EU manufacturers. If this were the case, the investigation will examine the likely impact of the measures on importers, users and consumers of battery electric vehicles in the EU”, announced Brussels, month of October.
Inspections are coming
And as part of this anti-subsidy investigation, the European Commission plans to inspect manufacturers. In a recently published article, Reuters mentions three companies: BYD, Geely and SAIC. Furthermore, the Commission has confirmed that visits will indeed take place, according to the agency. These are verification visits to manufacturers who have already responded to the questionnaires sent as part of the EU investigation.
Reuters sources indicate that Commission investigators would not visit non-Chinese brands that produce in China, such as Tesla or Renault. The representative of the Commission, for his part, explained that it had selected a representative sample of Chinese and European manufacturers, who had already responded to the questionnaires.
A error not to be reproduced
In any case, the aim of these inspections would be to verify the information that the manufacturers concerned have given to the European Commission via the questionnaires. And if these inspections mark progress, the investigation is still far from over, since it can last up to 13 months. But if, after this investigation, it is possible that the European Union will remedy the practices pointed out by implementing anti-subsidy duties on imports of battery electric cars from China.
For Ursula von der Leyen, President of the European Commission, the EU must above all avoid repeating the error it made in the past, on the solar market. “Too often, our companies find themselves excluded from foreign markets or are victims of predatory behavior. They are often beaten on price by competitors benefiting from enormous public subsidies. We have not forgotten how much our solar industry has suffered from China's unfair trade practices”, she declared during her 2023 State of the Union speech in September.
During this speech, she also underlined the fact that Europe is open to competition, but that this is only valid if it is fair. “This anti-subsidy investigation will be thorough, fair and based on facts”, she also said in October.
- In October 2023, the European Commission announced the opening of an anti-subsidy investigation targeting electric cars from China
- As part of this investigation, Brussels will send investigators to carry out verification visits to Chinese manufacturers who responded to its questionnaires
- According to Reuters, the brands concerned would be BYD, Geely and SAIC
- The investigation can last up to 13 months and after it, the European Commission may decide to take anti-subsidy measures targeting battery electric cars from China
- During her State of the Union 2023 speech, the President of the European Commission spoke of the European solar industry which “had suffered from China's unfair trade practices”
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