The EU China Chamber of Commerce responds to the latest European anti subsidy investigation on electric vehicles!

EU China Chamber of Commerce responds to the latest European anti subsidy investigation on electric vehicles

Statement by the European Union China Chamber of Commerce on the EU's announcement of launching a countervailing investigation against electric vehicles in China

September 13, 2023

Brussels, Belgium

The European Union China Chamber of Commerce expressed great concern and opposition to the European Commission President von der Leyen's announcement in his speech on "Union Situation" on September 13 that he would launch a countervailing investigation on electric vehicles from China.

Chinese electric vehicles and their upstream and downstream industry chain enterprises continue to innovate and accumulate overall industry advantages in the fierce domestic market in China. They provide consumers with high-end, cost-effective, and electric vehicles that can meet different needs, which are welcomed by global consumers, including European people. This advantage is not formed through so-called huge subsidies.

China's electric vehicle industry chain has a good cooperative relationship with Europe and even the global automotive industry chain, and behind every electric vehicle, there are efforts from suppliers of all sizes and tens of thousands around the world.

We urge the EU to objectively view the development of China's electric vehicle industry, rather than arbitrarily using unilateral economic and trade tools to prevent or increase the development and operating costs of Chinese electric vehicle products in Europe.

The opening of the European market should be reflected in concrete actions and provide a fair, just, and non discriminatory business environment for foreign enterprises. If market exclusion is made solely based on the origin of the product, it will violate the EU's commitments in the World Trade Organization.

Chinese enterprises, including the electric vehicle industry, are committed to achieving the global vision of carbon neutrality and will make unremitting efforts towards it. The EU China Chamber of Commerce hopes that EU policy makers and industry can work together to contribute to global green development.

Previously reported: The European Commission will launch a countervailing investigation into Chinese electric vehicles!

On September 13, Ursula Vondrein, the President of the European Commission, said that the European Commission would start a countervailing investigation on China's electric vehicles when she delivered the fourth "Union Situation Message" at the European Parliament.

"The global electric vehicle market is full of affordable Chinese cars. Their prices are low because they have received huge state subsidies, which is distorting our market." von der Leyen said that Europe is open to competition, but does not allow competition to the end. The EU must protect itself from unfair acts, but the EU will maintain open communication with China. What the EU needs to do is risk reduction, not decoupling. He also emphasized the importance of electric vehicles for the ambitious environmental goals of the European Union.

However, this proposal has been opposed by Germany, the largest automobile manufacturer in Europe, as well as industry officials from the European Union. Most EU member states have also expressed concerns, questioning whether this move will create a cocoon and harm the European automobile industry, and fearing a retaliatory response from China.

"This is a normal phenomenon, as France has previously proposed such an idea. This also indicates that China's electric vehicle competitiveness is relatively strong and may take further measures such as raising tariffs. In the short term, it will not have a significant impact on China's electric vehicles, and raising tariffs will limit China's electric vehicle exports," Cui Dongshu, Secretary General of the China Association of Automobile Manufacturers, told reporters.

From a global perspective, Chinese electric vehicle companies have a leading advantage. In the first half of this year, Chinese brands occupied 8 seats among the top 20 global electric vehicle sales rankings. Among them, BYD ranked first with a sales volume of 1.191 million vehicles, while Tesla sold 889000 vehicles. Last year, the sales gap between the two was less than 80000 units, and this year this number has reached about 300000 units.

In the past few years, although European car companies have started their electrification transformation, most of them are in the trial stage and their preparation level is relatively low. With the expansion of the new energy vehicle market, especially the rapid growth of the Chinese electric vehicle market, European car companies feel competitive pressure. In China, BYD surpassed FAW Volkswagen to become the domestic sales champion in 2022, which is a dangerous signal for European car companies. The declining market share of mainstream German and Japanese joint venture brands in China has raised concerns among foreign brands.

This year, BYD debuted at the Munich Auto Show and also released a new car, which means that BYD, which has achieved success in the domestic market, is now starting to test the European market. In addition, many car companies such as NIO, Xiaopeng, Lingpao, Great Wall, Geely, etc. have plans to go abroad to Europe.

China is the world's largest electric vehicle market, and earlier this year it surpassed Japan to become the world's largest exporter of automobiles. According to customs data, from January to July this year, China exported 2.778 million vehicles, a year-on-year increase of 74%, and the export value reached 55.2 billion US dollars, an increase of 103.6%. According to data from the China Association of Automobile Manufacturers, the proportion of China's automobile exports to Europe to China's total vehicle exports increased from 5.7% in 2018 to 39.1% in the first half of this year.

In addition, China's electric vehicle industry chain has advantages, and the Chinese new energy vehicle market has formed a scale effect, with the cost of electric vehicles produced in China significantly lower than other markets. In the field of core component batteries, Chinese battery company CATL ranks first in the global market.