Commission launches investigation on subsidised electric cars from China

This article is brought to you in association with the European Commission.

The European Commission has formally launched today an anti-subsidy investigation into the imports of battery electric vehicles (BEV) from China. The investigation will first determine whether BEV value chains in China benefit from illegal subsidisation and whether this subsidisation causes or threatens to cause economic injury to EU BEV producers. Should both prove true, the investigation will examine the likely consequences and impact of measures on importers, users and consumers of battery electric vehicles in the EU. Based on the investigation’s findings, the Commission will establish whether it is in the EU’s interest to remedy the effects of the unfair trade practices found by imposing anti-subsidy duties on imports of battery electric vehicles from China.

The investigation, announced by Ursula von der Leyen, President of the European Commission, on 13 September in the State of the European Union (SOTEU) speech, will follow strict legal procedures in line with EU and WTO rules, allowing all parties concerned, including the Chinese government and companies/exporters, to present their comments, evidence and arguments.

Ursula von der Leyen, President of the European Commission said: “The electric vehicle sector holds huge potential for Europe’s future competitiveness and green industrial leadership. EU car manufacturers and related sectors are already investing and innovating to fully develop this potential. Wherever we find evidence that their efforts are being impeded by market distortions and unfair competition, we will act decisively. And we will do this in full respect of our EU and international obligations – because Europe plays by the rules, within its borders and globally. This anti-subsidy investigation will be thorough, fair, and fact-based.” 

An own initiative case

The Commission launched this investigation on its own initiative (ex officio), having gathered sufficient evidence that the recent surge in low-priced and subsidised imports of electric vehicles from China into the EU posed an economic threat to the EU’s electrical car industry.

While no formal complaint was received from EU industry to launch proceedings, the EU’s anti-subsidy rules stipulate that EU industry be requested to cooperate in the ex officio investigation.

As per legal requirements under EU and WTO rules, pre-initiation consultations were held with the Chinese government prior to the publication of the Notice of Initiation.

Procedure and next steps

The Notice of Initiation published today summarises the allegations and explains the procedure that will be followed to determine the potential existence of subsidisation which constitutes a threat to the EU industry.

The investigation will be concluded within maximum 13 months of initiation. If legally warranted, any provisional anti-subsidy duties may be imposed by 9 months after initiation, with any definitive measures to be imposed up to 4 months later or within 13 months of the initiation of the investigation.

For More Information

Notice of Initiation

EU Trade Defence Policy

EU Anti-Subsidy Measures

Quote(s)

The electric vehicle sector holds huge potential for Europe’s future competitiveness and green industrial leadership. EU car manufacturers and related sectors are already investing and innovating to fully develop this potential. Wherever we find evidence that their efforts are being impeded by market distortions and unfair competition, we will act decisively. And we will do this in full respect of our EU and international obligations – because Europe plays by the rules, within its borders and globally. This anti-subsidy investigation will be thorough, fair, and fact-based.Ursula von der Leyen, President of the European Commission – 04/10/2023

Electric battery vehicles are crucial for the green transition and to meet our international commitments to reduce CO2 emissions. This is why we have always welcomed global competition in this sector, which means more choice for consumers and more innovation. But competition must be fair. Imports must compete on the same terms as our own industry. Fairness is also the watchword for this investigation: we will consult all relevant parties, and we will adhere rigidly to domestic and international rules. We hope for full cooperation from all relevant parties. The outcome will be based on facts.Valdis Dombrovskis, Executive Vice-President and Commissioner for Trade – 04/10/2023

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