Commission launches investigation into subsidized electric cars from China

THE European Commission officially launched an anti-subsidy investigation into imports of battery electric vehicles (BEVs) from China today. The research will first determine whether BEV value chains in China benefit from illegal subsidies and if that subsidy causes or threatens to cause economic damage to EU BEV producers.

If both prove to be true, the investigation will examine the possible consequences and impact of the measures on importers, users and consumers electric vehicles battery in the EU. Based on the findings of the investigation, the Commission will determine whether it is in the EU’s interest to remedy the effects of the unfair trade practices found by imposing anti-subsidy duties on imports of battery electric vehicles from China.

The investigation, announced by European Commission President Ursula von der Leyen on September 13 in the State of the Union (SOTEU) address, will follow strict legal procedures under EU and WTO rules, allowing all interested parties, including the Chinese government and companies/exporters, to present their comments, evidence and arguments.

THE Ursula von der Leyen stressed that “EU car manufacturers and related sectors are already investing and innovating to fully develop this potential. Where we find evidence that their efforts are being hampered by market distortions and unfair competition, we will act decisively and do so in full respect of our EU and international obligations. Because Europe plays by the rules, within its borders and globally. This anti-subsidy investigation will be thorough, fair and fact-based.” The Commission launched this investigation on its own initiative having gathered sufficient evidence that the recent increase in low-priced and subsidized electric vehicle imports from China into the EU posed an economic threat to the EU electric car industry. formal complaint by EU industry to initiate proceedings, EU anti-subsidy rules require EU industry to cooperate in the ex officio investigation.

In accordance with legal requirements under EU and WTO rules, pre-launch consultations were held with the Chinese government prior to the publication of the Notice (of launch).

Process and next steps

The notice of initiation published today summarizes the allegations and explains the process that will be followed to determine the possible existence of a subsidy that poses a threat to the EU industry.

The investigation will be completed within a maximum of 13 months from initiation. If legally justified, any provisional anti-subsidy duties can be imposed within 9 months of initiation, while any definitive measures will be imposed up to 4 months later or within 13 months of the initiation of the investigation.