28th Sep 2023

EU announces anti-subsidy probe into Chinese EVs

  • Chinese car brand is set to start delivering it's latest model ET5 to the European market in the fourth quarter of 2023 (Photo: Flickr)
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The EU Commission will launch an anti-subsidy investigation into Chinese electric vehicles (EVs) which are "flooding" the market.

"We have to be clear-eyed about the risks we face," commission president Ursula von der Leyen told MEPs, who had gathered to listen to her annual address on Wednesday (13 September). "Chinese cars are distorting the market, their price kept artificially low by huge state subsidies."

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  • EU commission president Ursula von der Leyen addressing MEPs for her annual speech (Photo: European Parliament)

"Too often, our companies are excluded from foreign markets or are victims of predatory practices," she added, arguing that EU companies are often undercut by competitors benefitting from huge state subsidies. "We have not forgotten how China's unfair trade practices affected our solar industry."

"Europe is open for competition. Not for a race to the bottom," she warned, announcing that the commission is launching an anti-subsidy investigation into electric vehicles coming from China.

The French government has pushed for such a probe for months, and von der Leyen recently discussed Chinese trade practices with Chinese premier Li Qiang on the sidelines of the G20 summit in New Delhi last weekend.

Although Chinese EVs have yet some distance to cover before becoming dominant in the European market, overall Chinese car exports have more than quadrupled since 2021, surpassing Japan this year as world leader in EV car exports.

The amount of capital injected into the Chinese EV market is so copious, and the development of newer, more advanced models so swift, that obsolete electric cars are reportedly piling up in graveyards across China.

Many of Europe's largest carmakers have called on the EU to close the floodgates for Chinese electric vehicles but lack a unified message.

French politicians and carmakers insist on protective measures and import levies, which is also the route the United States has followed, where Chinese EVs face stiff 27.5 percent tariffs.

However, a similar route for the EU seems unlikely, as China is the biggest market for German car brands like BMW, Mercedes Benz and Volkswagen.

BMW chief executive Oliver Zipse, for example—supported by a broad coalition of German automotive and industrial lobby organisations as previously reported by EUobserver—instead has become the leading advocate for hydrogen-powered cars as an alternative to EVs, a technology which is not commercially viable, and which critics say is being used as a "trojan horse to prolong the use of fossil fuels."


Von der Leyen also used her speech to neutralise a rightwing insurgency against EU climate policies, led most notably by Manfred Weber, a member of her own European People's Party (EPP).

For every new piece of green legislation, she pledged to conduct a "competitiveness check" by an independent board.

She tasked the EU's new Green Deal chief, Maroš Šefčovič, to lead a series of Clean Transition Dialogues with industry sectors.

Details about these talks are still sparse, and the commission did not respond in time to a request for further information. But von der Leyen did single out the wind industry.

The sector has been plagued by delays and cancellations due to rising costs.

"Our wind industry is a European success story, but it is currently facing a unique mix of challenges," she said.

To this end, von der Leyen announced a European Wind Power package, which aims to reduce permitting times and improve auction systems and access to finance, a model she suggested might be used in other sectors as well.

"From wind to steel, from batteries to electric vehicles, our ambition is crystal clear," she said. "The future of our cleantech industry has to be made in Europe."

To pay for this, Europe needs "common funds," she said.

But the idea of a common EU sovereignty fund first floated by von der Leyen in her State of the Union speech last year has been replaced by the far more limited 'Step' platform, a technology fund rehashed from already-existing funds.


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