| The European Union has fired the first salvo in a potential trade war with China over electric vehicles, announcing it would launch an investigation into Beijing’s public subsidies to the sector.
The probe will extend not only to Chinese auto makers such as BYD and Xpeng, whose share prices fell in response to the announcement, but also to non-Chinese brands made in China, including Tesla. The EU slapped tariffs on Chinese manufacturers of photovoltaic cells in 2012, but ended up backing down because its own industry could not keep up with demand.
“Europe is open for competition. Not for a race to the bottom. We must defend ourselves against unfair practices.”Chinese cars make up less than 10 per cent of EV sales in Europe, and most are Chinese-owned brands with a European flavour such as MG and Volvo. But the Chinese EV industry has achieved mass scale at home – prompting European fears that the Chinese will overwhelm the continental market before the likes of BMW, Stellantis and VW have fully rolled out their own EV offerings.
“From wind to steel, from batteries to electric vehicles, our ambition is crystal clear: the future of our clean-tech industry has to be made in Europe,” Ms von der Leyen said on Wednesday.