China has raised concerns over what it considers a “very short” consultation period provided by the European Union regarding its investigation into electric vehicle (EV) subsidies. This inquiry, initiated by the European Commission, aims to assess whether tariffs should be imposed to protect EU producers from an influx of cheaper Chinese EVs allegedly benefiting from state subsidies.
China Disputes Investigation and Seeks Adequate Consultation
China’s commerce ministry expressed its dissatisfaction with the anti-subsidy investigation, citing a lack of sufficient evidence and non-compliance with World Trade Organization (WTO) rules. The Chinese side claimed that it had not received adequate consultation materials and would closely monitor the Commission’s investigative procedures to protect the interests of its firms. Additionally, China urged the EU to uphold the global supply chain’s stability and the strategic partnership between the two entities while cautiously applying trade remedies.
CAAM Criticizes Investigation as Protectionism
The China Association of Automobile Manufacturers (CAAM) characterized the EU probe as a clear act of protectionism that could hinder the global EV industry’s growth. The formal launch of the investigation was announced in the EU’s official journal, which stated that China had been invited for consultations without specifying a timeframe for the talks. According to information gathered by the Commission, Chinese producers are believed to benefit from various subsidies at the expense of the EU industry. These subsidies come in the form of grants, preferential loans from state-owned banks, tax incentives, rebates, and exemptions, as well as the provision of goods and services by the state at below-market prices.
Rapid Increase in Cheap Imports and EU Market Share
The Commission noted that these subsidies have led to a rapid surge in low-cost imports into the EU, with the expectation of overcapacity in China resulting in further increases in the near future. It further highlighted that China’s share of EVs sold in Europe has already reached 8% and could potentially rise to 15% by 2025. Parties interested in a hearing were advised to request one within 15 days, with a comment submission deadline set at 37 days.