European Commission Investigates Chinese Automakers Amidst Growing EV Tensions
European Commission investigators are gearing up for inspections on Chinese automakers in the weeks ahead. This move is part of a broader inquiry into whether punitive tariffs should be imposed to safeguard European electric vehicle (EV) manufacturers, intensifying the ongoing tensions between Beijing and the EU.
Inspections will focus on BYD (002594.SZ), Geely (0175.HK), and SAIC (600104.SS), intentionally excluding non-Chinese brands produced in China such as Tesla (TSLA.O), Renault (RENA.PA), and BMW (BMWG.DE). Launched in October, the 13-month probe aims to assess whether Chinese-made EVs, benefiting from state subsidies, unfairly compete with their European counterparts.
Confirmation from the European Commission
The European Commission has officially confirmed the upcoming visits, stating, “The Commission selected a representative sample of Chinese and EU producers, which have already replied to the questionnaires.” Olof Gill, European Commission Spokesperson for Trade, added, “The Commission will carry out verification visits at their premises in January-February 2024.”
China’s commerce ministry, BYD, and SAIC have not yet responded to requests for comments. Geely, while declining to comment, referred to its October statement affirming compliance with laws and support for fair global market competition.
Sources indicate that verification visits are scheduled for this month and February, with on-site inspections aimed at validating automakers’ questionnaire responses. The probe, classified as in the “initiation stage,” mandates verification visits by April 11, as outlined in European Commission documents.
Last week, China initiated an anti-dumping investigation on brandy imported from the European Union, seemingly targeting France, a supporter of the EV probe. Notable Chinese models exported to Europe include SAIC’s MG and Geely’s Volvo.
Chinese-made vehicles now claim 8% of the European Union’s EV market share, projected to reach 15% by 2025. These EVs are typically priced 20% lower than their EU-made counterparts. In October, Great Wall Motor (601633.SS) declared itself the first automaker to respond to the EU subsidy investigation.
Sino-EU relations, strained by various factors, including China’s closer ties with Moscow post-Russia’s invasion of Ukraine, reflect the EU’s efforts to reduce dependency on China for materials essential to its green transition. Simultaneously, Chinese EV manufacturers, including BYD, Xpeng (9868.HK), and Nio (9866.HK), are expanding overseas, making Europe a priority amid fierce domestic competition.
China, estimated to surpass Japan as the world’s leading auto exporter in the previous year, shipped 5.26 million vehicles valued at around $102 billion, according to a Chinese auto association.
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