According to insiders, the EU has launched investigations against Chinese electric car manufacturers due to possibly unjustified state subsidies. The investigation, which started in October, will last 13 months, three people familiar with the matter told Reuters.
The inspectors should make on-site visits to check whether electric car manufacturers in China are unfairly benefiting from government subsidies. EU competition watchdogs are considering possible punitive tariffs to protect European manufacturers.
BYD, Geely and Saic
Inspectors are looking at Chinese manufacturers BYD, Geely and Saic, two of the people said. According to one of the insiders, brands of foreign car companies that are produced in China, such as BMW, Tesla and Renault, are not affected. According to the European Commission, the investigation is in the introductory phase and the inspection visits will take place until April 11. In October, Great Wall Motor became the first Chinese car company to announce it had submitted responses to the EU review.
Tensions increased
This move has increased tensions between the EU and China. The international community wants to reduce its dependence on the world’s second largest economy, especially for the materials and products it needs for its economic transformation. Beijing describes the investigations as protectionist. In early January, China launched an anti-dumping investigation into cognac imported from the EU. The country may be taking aim at France, which is supporting current investigations by EU competition watchdogs. In addition, at the end of December, the People’s Republic tightened its export laws regarding rare earth metals.
Thanks in part to price discounts, China has recently boosted demand for cars and overtaken Japan as the world’s largest car exporter. Chinese electric car makers, which are increasingly entering foreign markets, provided a tailwind. Among the best-known products exported to Europe are Saic’s originally British brand MG and the Swedish car manufacturer Volvo, part of Geely.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
