European Union opens investigation into Chinese state subsidies for electric automobiles

“Europe is open to competition. Not a race to the bottom”. In his State of the Union addressthe President of the European Commission, Ursula von der Leyen, announced the opening of an investigation into Chinese public subsidies for electric automobiles in order to defend the European industry, Wednesday September 13.

“Global markets are now flooded with cheap Chinese electric cars, the price of which is kept artificially low by mive government subsidies”erted Mme von der Leyen facing MEPs who applauded the announcement of the opening of the investigation.

The European Automobile Manufacturers’ ociation (ACEA) welcomed “a positive signal” which shows that “ the European Commission recognizes the increasingly asymmetrical situation that our industry is facing and is urgently addressing the distortions of competition in our sector”, declared Sigrid de Vries, the general director of the ociation. ACEA demands “a solid and global industrial strategy” of magnitude for ” compete “ with the rest of the world.

France pleads for European protectionism

The French Minister for Foreign Trade, Olivier Becht, also welcomed the opening of the investigation: “It’s legitimate: we must restore fair conditions of competition”did he declare. “France is committed to ensuring that the playing field is the same for everyone”.

Paris in particular has been pushing in recent months for a Europe that erts itself more in the face of practices deemed protectionist by China. The Minister of the Economy, Bruno Le Maire, recently pleaded for ” evolve “ European rules so that the European Union better defends its interests. But other member countries, like Germany, which rely more on international trade, fear wrinkle Beijing.

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European companies “are often beaten on price by competitors benefiting from enormous public subsidies. We have not forgotten how much our solar industry had suffered from China’s unfair trade practices »said Ursula von der Leyen.

The French government is preparing a reform of subsidies for electric cars in France, which should soon be subject to a “environmental score” likely to limit Chinese imports.

This is a wish expressed by Mr. Le Maire at the end of August. He had mentioned a “European bonus reserved for industrial products with European content”during a meeting in Paris with French bosses. “That’s what China does, that’s what the United States does, that’s what I still can’t do in Europe because of European standards”he regretted.

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A “dialogue” maintained between the EU and China

“We must defend ourselves against unfair practices. But it is equally essential to keep our lines of communication open and continue our dialogue with China. Because there are also subjects on which we can and must cooperate”underlined Ms. Von der Leyen on Wednesday.

Moreover, as soon as the announcement made by Ursula Von der Leyen, the Trade Commissioner, Valdis Dombrovskisannounced that he would travel to China next week “to discuss business and economic opportunities and challenges”, on X (formerly Twitter).

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China has long been relying on electric engines in automobiles and has taken a lead over Europe, particularly in battery technologies. Its manufacturers rely on their immense domestic market, the first in the world, to now conquer Europe through strong economies of scale from which they benefit.

Faced with increased competition in the domestic market and a slowdown in the economy, Chinese manufacturers are increasingly turning to exports. Their market share in Europe rose to 8% this year for new electric cars, compared to 4% in 2021, according to the Inovev firm.

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The World with AFP

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