AUTONEWS

The European Union has officially opened an investigation into electric cars made in China

The European Commission this Wednesday formally opened an investigation into China for alleged illegal aid, such as direct aid and credits, in the sensitive and strategically important electric car sector, with Brussels highlighting that it has sufficient evidence against Beijing.

The information was published this Wednesday in the Official Journal of the European Union (EU), around three weeks after the institution's announcement, indicating the European Commission that, “on its own initiative”, begins an investigation “based on the fact that imports of new battery electric vehicles, designed for the transport of passengers, originating in the People's Republic of China are being subject to subsidies, thus causing injury to the Union industry”.

“Following an in-depth analysis of recent market developments and taking into account the sensitive nature of the electric vehicle sector and its strategic importance for the EU economy in terms of innovation, added value and employment, the Commission obtained information on the market to from several independent sources”, which “indicate the existence of illegal subsidy practices”, adds Brussels in the argument.

The community executive also guarantees that it has “sufficient evidence that imports of the product under investigation, originating in the People's Republic of China, benefited from subsidies subject to countervailable measures granted by the government”, which led to the rapid growth of Chinese brands on the market European.

Specifically, the European Commission states in the Official Journal of the EU that it has evidence of various direct aid, loans, export credits and lines of credit granted by state banks or even tax benefits. The investigation covers alleged illegal practices between October 1, 2022 and September 30, 2023.

Brussels also warns Beijing that “if an interested party refuses access to the necessary information, does not provide it within the established deadline or significantly impedes the carrying out of the investigation, provisional or definitive conclusions, positive or negative, may be drawn based on the data available.”

According to data from the European Commission, Chinese electric cars, which recently entered the EU, already represent 8% of the total market, being 20% cheaper compared to European competition.

China, which has emerged as an economic power, has advanced a robust state investment strategy, which the EU disputes as affecting competition.

At issue are large subsidies to Chinese companies investing abroad, mainly in strategic sectors. The size of the Chinese market and strong state support have led to the rise of local brands, including BYD, NIO or Xpeng.

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