A PYMNTS Company

EU Investigates Unfair Subsidies for Tesla, BMW, and Renault

 |  September 26, 2023

European authorities have launched an inquiry into the subsidization of Chinese electric vehicles, emphasizing that the outcome of this investigation remains uncertain, according to the European Union’s top trade official.

Approximately two weeks ago, the European Commission unveiled an investigation into government subsidies provided to electric vehicle manufacturers in China. The investigation is specifically focused on subsidies related to electric vehicle production and will maintain a “fact-based” approach, as stated by Valdis Dombrovskis, the Executive Vice President and Trade Commissioner of the European Commission. Dombrovskis made these remarks during a press conference in Beijing after a four-day visit to China.

He emphasized that the investigation will adhere to both European Union and World Trade Organization regulations and will involve consultations with Chinese authorities and businesses. Dombrovskis refrained from making any preemptive judgments regarding the outcome of the investigation.

Related: EU Watchdogs Raid Auto Companies In Various Countries

China has witnessed a notable surge in electric car exports in recent months, surpassing Germany and poised to outpace Japan as the world’s largest car exporter this year, encompassing all car types, according to Moody’s. While Chinese electric vehicle companies such as Nio, Xpeng, and BYD have begun expanding into the European market, their presence remains relatively modest. A significant portion of China’s electric vehicle exports to Europe is attributed to Tesla and other international brands producing vehicles in China, according to HSBC.

However, the potential implications for businesses are substantial. Dombrovskis underscored the EU’s intention to phase out sales of internal combustion engine cars by 2035. He also noted that Chinese electric vehicle brands’ market share in the EU has surged from under 1% to 8% over the past two to three years.

Source: Reuters