Home Business EU trade chief states China EV probe outcome cannot be preconceived.

EU trade chief states China EV probe outcome cannot be preconceived.

EU trade chief states China EV probe outcome cannot be preconceived.

Europe has initiated an investigation into electric vehicle (EV) subsidies in China as part of a wider probe into the Chinese EV market. The investigation will focus on subsidies for EV production and will be conducted in compliance with EU and World Trade Organization rules, according to Valdis Dombrovskis, executive vice president and trade commissioner of the European Commission. He emphasized that no assumptions should be made about the outcome of the investigation. China’s electric car exports have increased significantly in recent months, surpassing those of Germany and on track to surpass Japan as the world’s largest car exporter this year. Chinese EV companies such as Nio, Xpeng, and BYD have started to expand into Europe, although their numbers are still relatively small compared to international brands manufacturing in China.

The European Union’s probe into Chinese EV subsidies has potential consequences for the business. The EU plans to phase out sales of internal combustion engine cars by 2035, and the share of Chinese EV brands in the EU market has grown from less than 1% to 8% in the last few years, according to Dombrovskis. The investigation also considers the “risk of injury” to the European auto industry. European auto giants like Volkswagen have struggled to penetrate the highly competitive Chinese EV market but have sought partnerships with Chinese EV startups. China’s Ministry of Commerce has criticized the EU investigation, calling it a “blatantly protectionist act” that would distort the global auto industry. However, Dombrovskis highlighted that the probe was discussed in almost every meeting with his Chinese counterparts.

China has long focused on developing its electric car industry and has invested billions of yuan in subsidies for electric vehicle development. The recent subsidies have mainly targeted tax breaks for consumers and have contributed to China’s economy by driving advanced manufacturing, retail sales, and exports.

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