Home » China’s Electric Vehicle Exports Face Potential Countervailing Investigation by EU: Implications for Chinese Car Companies in Europe

China’s Electric Vehicle Exports Face Potential Countervailing Investigation by EU: Implications for Chinese Car Companies in Europe

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China’s Electric Vehicle Exports Face Potential Countervailing Investigation by EU: Implications for Chinese Car Companies in Europe

Title: China’s Electric Cars Encounter Hurdles as EU Launches Countervailing Investigation

China’s electric car industry, which has experienced significant growth in recent years, is facing obstacles as the European Union (EU) launches a countervailing investigation into imported vehicles from China. The investigation aims to evaluate whether punitive tariffs are necessary due to alleged government subsidies, which distort the European market with low prices. With Chinese electric cars gaining popularity in Europe, the impact of such an investigation could have significant ramifications for the industry.

Growing Presence of Chinese Electric Cars in Europe:
According to data from Inovev, 10% of electric cars sold in Europe this year were manufactured by Chinese brands. The European Commission estimates that this figure may reach 15% by 2025. Europe has become a lucrative market for Chinese car companies due to relatively lower tariffs compared to the United States.

Munich Motor Show 2023 Highlights Chinese Presence:
The Munich International Motor Show, held from September 4th to 10th, showcased the strong presence of Chinese electric vehicle manufacturers. Companies like BYD, SAIC MG, Leapmotor, and Avita Technology, as well as power battery companies like CATL and Sunwanda Power, garnered significant international attention at the event.

Impact on Tesla and German Car Manufacturers:
While the EU investigation targets Chinese electric vehicle exports, not all cars exported by China are of Chinese origin. Chinese car companies with European capital background, independent new energy car companies, and foreign car companies produced in China are the main exporters. Tesla, in particular, may bear the brunt of the impact, as it plans to transfer some of its production capacity from Europe back to its US factory to avoid the investigation’s effects. German car manufacturers, including Volkswagen, Mercedes-Benz, and BMW, have also expressed concern, as punitive tariffs imposed by the EU could hamper their sales in the Chinese market.

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Diverging Opinions within the EU:
Opinions within the EU regarding countervailing investigations differ significantly. While German Federal Transport Minister Wiesing opposes punitive tariffs, French President Macron emphasizes the need for policies to promote reindustrialization and reduce dependence on imported electric vehicles. French car companies, such as Renault, face tough competition from Tesla and Chinese manufacturers.

Accelerating Overseas Expansion:
Despite the potential repercussions of the EU investigation, many analysts believe it may serve as an accelerator for Chinese car companies’ overseas expansion. As a result, Chinese car companies are likely to speed up the construction of localized factories and operations in Europe. SAIC MG and BYD, among others, have already seen increased sales in Europe and have plans to establish vehicle factories within the region.

China’s Advantages:
China’s new energy vehicle industry maintains leading advantages in technology and cost. Chinese companies enjoy a large market share, with 76% of the world‘s power battery production capacity. They also benefit from self-supplied parts, giving them a 25% cost advantage over North American and European car brands. Additionally, Chinese electric vehicles are priced competitively compared to their European counterparts, with a price advantage of around 20%.

As the EU launches a countervailing investigation into Chinese electric vehicle exports, the industry’s future remains uncertain. With Chinese car companies increasingly eyeing the European market and enjoying significant cost advantages, the investigation may accelerate their overseas expansion. Meanwhile, German car manufacturers and French car companies face potential challenges in both the EU and Chinese markets.

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