EU Launches Inquiry into China's State Support for Electric Car Manufacturers Amid Concerns for European Auto Industry

Brussels, European Union — The European Union has initiated an investigation into China's extensive state support for electric vehicle manufacturers, driven by growing concerns about the impact of surging imports on the future of European carmakers.

European Commission President Ursula von der Leyen addressed the European Parliament on Wednesday, emphasizing Europe's commitment to healthy competition while simultaneously expressing reservations about descending into a "race to the bottom."

Von der Leyen stated, "Global markets are now flooded with cheaper electric cars, and their prices are being kept artificially low through substantial state subsidies. Therefore, I can announce today that the Commission is commencing an anti-subsidy inquiry into electric vehicles originating from China."

Currently, Europe imposes a 10% duty on cars imported from China, a rate significantly lower than the 27.5% duty levied in the United States. Chinese manufacturers have skillfully leveraged this discrepancy, establishing a substantial and rapidly expanding presence in the European market.

In the first half of this year, Chinese companies exported nearly 350,000 electric vehicles to nine European nations, surpassing their total exports for the entirety of 2022, according to data from the China Passenger Car Association. Over the past five years, European Union imports of Chinese automobiles have quadrupled.

A recent estimate by UBS suggests that by 2030, Chinese automakers could double their global market share from 17% to 33%, with European firms expected to experience the most significant decline in market share.

This investigation marks a significant step by the European Union to address the perceived disparity in state support and promote equitable competition within the electric vehicle sector.