Investigators from the European Commission will inspect Chinese automakers in the coming weeks to decide whether to impose punitive tariffs on them to protect European electric vehicle (EV) makers, Reuters reported. The probe will be focused on Chinese brands such as BYD, Geely and SAIC, while the non-Chinese brands produced in China such as Tesla, Renault and BMW will be discounted.
Investigators to carry out on-site inspections
The probe was launched in October and could last up to 13 months, seeking to determine whether cheaper, Chinese-made EVs benefit unfairly from state subsidies. As per a source, the investigators have already arrived in China, while another said visits are scheduled for this month and February. During their visits, the investigators will carry out verification work such as on-site inspections and give questionnaires to the automakers. As per European Commission documents seen by Reuters, the probe is at “initiation stage” while the verification visits are due by April 11.
Share of Chinese EVs rising in EU
The share of Chinese-made vehicles in the European Union’s EV market has risen to 8% and is expected to reach 15% by 2025. These EVs typically sell for 20% less than EU-made models, thus becoming quite popular among buyers. SAIC’s MG and Geely’s Volvo are most seen Chinese models in Europe.
Strenuous relations between EU and China
The move made by the European Commission is being called protectionist by China, and has escalated tensions between the latter and EU. In fact, last week, China opened an anti-dumping investigation on brandy imported from the EU, a step that appeared targeted at France, which backs the EV probe. Other factors leading to strenuous relations between the two countries include Beijing’s closer ties with Moscow after Russia’s invasion of Ukraine. Further, the EU is seeking to reduce its reliance on the world’s second-largest economy, particularly for materials and products needed for its green transition.