EU mulls tariffs against Chinese electric cars

The European Commission started an investigation on Wednesday to assess whether the EU needs to impose tariffs to protect itself against Chinese electric vehicle producers benefiting from state subsidies.

“Global markets are now flooded with cheaper electric cars. And their price is kept artificially low by huge state subsidies,” European Commission president Ursula von der Leyen said in her annual address to the bloc’s parliament.

European carmakers have realised they have a fight on their hands to produce lower-cost electric vehicles and erase China’s lead in developing cheaper, more consumer-friendly models.

Von der Leyen stressed the importance of electric vehicles to the EU’s ambitious environmental objectives.

“So I can announce today that the commission is launching an anti-subsidy investigation into electric vehicles coming from China. Europe is open to competition. Not for a race to the bottom,” she told the European Parliament.

Chinese brands are making significant inroads into Europe after long struggling with a reputation for lower-quality cars. China’s share of the European car market has risen from 0.1% in 2019 to 2.8% in the first seven months of 2023, according to Schmidt Automotive Research.

The Chinese share of the EU market for battery-electric cars rose from 0.5% in 2019 to 8.2% so far in 2023.

At last week’s Munich auto show, BMW CEO Oliver Zipse said Chinese carmakers posed an imminent risk to the European industry, particularly for the makers of cheaper models. He told the Financial Times that the base car market segment will either vanish or will not be done by European manufacturers.

With Reuters