Understanding the Controversy: Chinese Electric Car Subsidies and EU Investigation

2023-10-05 18:22:00

While the Commission has just published evidence on “ subsidies » granted by the Chinese government to electric cars, Beijing expresses its dissatisfaction.

The European Union imposes “ deadlines too short »

At the beginning of September, Ursula Von der Leyen announced the launch of an investigation into subsidies granted to Chinese electric models sold on European soil.

According to Automotive News Europe, China has expressed its dissatisfaction with the behavior of the European Union in the context of this investigation into electric cars. Beijing believes that the work carried out by the Commission is not “ according to » to the rules of the World Trade Organization.

China says “ very dissatisfied “. The government claims to have received no adequate consultation document. Beijing promises to closely follow the European Commission’s investigation procedures to protect the rights and interests of its domestic companies. China also calls on the European Union to “ preserve the stability of the global supply chain ».

For its part, the Commission has moved forward and has just published in an official document “ the evidence » subsidies granted by China to Chinese automobile manufacturers. The investigators speak in particular of “ the granting of loans and export credits provided by public banks “. Among the aid that would also benefit electric vehicles manufactured in China, there is talk of reductions and exemptions from income tax and a tax exemption for dividends.

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Electric cars: China illegally helps its manufacturers, Europe has proof

Von der Leyen wants to protect European manufacturers

The President of the European Commission says “ open to competition ”, but not at any price. This is why an investigation was initiated. The idea is to decide whether or not to implement taxes on Chinese electric vehicles sold in Europe. Stated objective: to protect manufacturers in the European Union from “ deluge of Chinese models sold cheaper » which, according to the Commission, “ benefit from state subsidies ».

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Electric cars produced in China: towards a surge in customs duties?

According to Brussels executives, “ China was invited to consultations “. In the official publication, it is advised to “ all parties wishing a hearing to request one within 15 days “. Investigators have gathered evidence showing that manufacturers specializing in electric cars benefit from loans granted by public banks on preferential terms, tax reductions, rebates and exemptions. As well as the supply of raw materials and components “ at prices lower than those charged in the sector ».

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