Beijing has blasted the launch of a probe by the European Commission into China’s electric vehicle (EV) subsidies as protectionist and warned it would damage economic relations, according to Reuters.
European Commission President Ursula von der Leyen announced the investigation on Wednesday, accusing China of flooding global markets with electric cars at artificially low prices due to huge state subsidies.
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“Global markets are now flooded with cheaper Chinese electric cars. And their price is kept artificially low by huge state subsidies,” President von der Leyen said.
Beijing has since blasted the investigation as a protectionist act aimed at shielding Europe’s own industry in the name of “fair competition”, and warned economic ties could be harmed.
“To tell the truth, when Chinese new energy vehicles shone brightly at the recent 2023 International Motor Show in Germany, we heard some envious and even jealous remarks but we didn’t expect Europe’s response to be so ‘excessive’,” the Global Times said in an editorial.
Eurasian Group analysts warned that should the EU levy duties against subsidised Chinese EVs, Beijing would likely impose countermeasures to hurt European industries.
EU officials believe Chinese EVs are undercutting the prices of local models by about 20% in the European market, piling pressure on European automakers to produce lower-cost EVs.
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The Commission said China’s share of EVs sold in Europe had risen to 8% and could reach 15% in 2025.
In 2022, 35% of all exported electric cars originated from China, according to U.S. think-tank the Center for Strategic and Internal Studies (CSIS), with most destined for Europe. The single largest exporter from China is US giant Tesla.