EU to start an investigation into electric car subsidies

Electric cars are considered a vital part of the EU’s move towards a clean economy and for reaching targets to reduce carbon emissions. However, in recent years the global markets have started to be dominated by cheaper electric cars manufactured in China. 

In light of this, the EU has announced an anti-subsidy enquiry into low-cost electric vehicles from China, with President of the European Commission Ursula von der Leyen criticising the huge subsidies that are currently keeping these cars at an artificially low price. 

In a speech, she said that the electric car industry is a “crucial industry for the clean economy, with a huge potential for Europe. But global markets are now flooded with cheaper Chinese electric cars. And their price is kept artificially low by huge state subsidies.”

She added, “This is distorting our market. And as we do not accept this from the inside, we do not accept this from the outside. So I can announce today that the Commission is launching an anti-subsidy investigation into electric vehicles coming from China. 

Europe is open to competition but not to a race to the bottom. We must defend ourselves against unfair practices. Competition is only true as long as it is fair. Too often, our companies are excluded from foreign markets or are victims of predatory practices.

They are often undercut by competitors benefitting from huge state subsidies. We have not forgotten how China’s unfair trade practices affected our solar industry. Many young businesses were pushed out by heavily subsidised Chinese competitors. 

Pioneering companies had to file for bankruptcy. Promising talents went searching for fortune abroad, This is why fairness in the global economy is so important – because it affects lives and livelihoods.”

The announcement was unexpected, and it could also be a big change in EU-China relations, as some MEPs have pushed for an enquiry into how Chinese electric vehicles could benefit from the EU’s approach to the climate crisis. 


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