The European Commission is investigating whether the Chinese State is granting illegal state aid for the sale of battery electric vehicles in China and whether such state aid is causing economic injury to EU producers of these vehicles.
According to the European Commission’s Communication, the investigation will follow a rigorous legal procedure in line with EU and WTO rules and will allow all interested parties, including the Chinese government and Chinese companies/exporters, to submit comments, evidence and arguments.
« The electric vehicle sector has a huge potential for Europe’s future competitiveness and green industrial leadership. EU car manufacturers and related sectors are already investing and developing innovative solutions to fully exploit these opportunities. We will take strong action whenever we find evidence that their efforts are hampered by market distortions and unfair competition. We will do so in full respect of our EU and international obligations, as Europe plays by the rules, both within its borders and around the world. This anti-subsidy investigation will be thorough, fair and based on facts, » said European Commission President Ursula von der Leyen.
The Brussels-based China Chamber of Commerce and Industry (CCCEU) expresses its strong dissatisfaction with the anti-subsidy investigation.
The Chinese government’s concern stems from the lack of substantive complaints from EU industries, « which raises doubts about the necessity and fairness of the investigation. » According to the CCCEU, the European Commission has not sufficiently taken into account the potential negative impact of the investigation on the electric vehicle industrial supply chain, China-EU trade relations in general and global green objectives.
According to the CCCEU, this investigation sends a dissuasive message to Chinese investors in the EU and contradicts the EU’s own objectives, such as promoting the electricity sector in the framework of the « European Green Deal ».
« The selective targeting of Chinese EV manufacturers and the exaggerated portrayal of the ‘risk of harm’ of Chinese exports to the EU market ignores the mutually beneficial nature of global EV supply chains. This not only hinders fair competition but also harms the common interests of the EU and the global automotive industry. CCCEU is therefore also deeply concerned about protectionist tendencies and the increasing politicisation of the EU business environment. » reads a statement from the China Chamber of Commerce. They add that the Chamber will closely follow the investigation and expects the European side to ensure fair trial, full rights of defence for Chinese enterprises and a fair, non-discriminatory and predictable market environment.
European manufacturers see the root of the problem elsewhere. They say there is a real danger that European carmakers will fall behind Chinese rivals in electric cars, as evidence by the fact that export-oriented German car brands have already lost out in China. At the same time, sales of Chinese-made electric cars, including Tesla and Renault’s Dacia brand, are growing steadily and increasingly in Europe.
European car manufacturers say it is not about unfair practices or lax environmental standards outside Europe. It is because the Chinese have better batteries, better software and better infotainment systems. European carmakers are also lagging behind because they have been too slow to invest in electrification.
The European Commission is also to blame for this backlog! First « clean diesel » was promoted, then came Dieselgate. So the industry pretended that plug-in hybrids, which use both electric and petrol propulsion, were a better solution. However, these were soon found to be ‘fake electric cars’, leading European governments to discourage their purchase.
The European Union is now back on the wrong track by combining synthetic diesel and petrol with hydrogen and coal. The European Commission claims that this will save internal combustion engines from obsolescence. But these e-fuels are simply making the European car industry an e-fool.
