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European Commission investigators are getting ready for a voyage to the heart of the Chinese electric vehicle industry. Their mission: to assess whether punitive tariffs should be slapped on Chinese carmakers like BYD, Geely, and SAIC, to safeguard Europe’s EV manufacturers. Reuters recently broke the news, citing insights from three sources privy to this audacious undertaking.
These investigators are not leaving any stones unturned, and their sights are firmly set on BYD, Geely, and SAIC. However, don’t expect them to drop by the factories of non-Chinese brands manufacturing in China, including Tesla, Renault, and BMW. These three giants appear to have been spared the inquisition.
According to insiders, some investigators have already touched down in China, while others are making their travel arrangements for visits scheduled for this month and February. Their objective? On-site inspections and verification work, which essentially boils down to cross-checking automakers’ responses to the commission’s inquiries.
The European Commission’s investigation is still in its “initiation stage,” with verification visits expected to conclude by April 11. Ursula von der Leyen, President of the European Commission, announced the investigation back on September 13. The primary aim was to evaluate whether China’s EV supply chain had been buoyed by subsidies and if these subsidies had caused or were likely to cause economic harm to European EV manufacturers.
The timeline for this inquiry is quite clear: a maximum of 13 months from initiation for the investigation to be wrapped up. If deemed legally warranted, provisional anti-subsidy duties might be imposed within nine months of initiation, with definitive measures following within four months or, at the latest, within 13 months of the investigation’s commencement.
China, not surprisingly, voiced its objection, alleging that the investigation lacked sufficient evidence and violated WTO rules. The Chinese Ministry of Commerce (MOC) didn’t mince words, labeling this move as “blatant protectionist behavior” that could severely disrupt and distort the global automotive industry.
Stella Li, BYD’s executive vice president, stated that the company would continue to strive for robust growth in Europe, cooperating fully with EU authorities to dispel any concerns about its production practices.
Initial reports from last year indicated that Tesla was among the companies potentially benefiting from Chinese subsidies, a revelation uncovered during the EU’s evidence-gathering phase. Furthermore, on October 6, Bloomberg disclosed that the EU had reached out to BMW, soliciting information regarding the BMW iX3 cars produced in Chinese factories and exported globally, as part of the ongoing investigation.
In a climate of growing concern over international trade practices, the EU’s investigation is meant to safeguard its domestic EV industry. The potential repercussions are significant, not only for Chinese carmakers but also for the broader automotive landscape.
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