EU to Investigate Chinese EV Makers over Competition Concerns
Chinese automakers are making gains in Europe’s electric vehicle (EV) market.
The competitive threat has led the European Union to launch an investigation into China’s government support for its EV industry.
The investigation adds to technology-related tensions between the West and China. At the same time, China is one of Europe’s biggest trading partners and the world’s biggest auto market.
Chinese EV markers and Europe
Chinese EV makers like Europe because auto import taxes are just 10 percent compared to 27.5 percent in the United States, automotive expert Matthias Schmidt said. Europe also has the world’s second-biggest EV battery market after China.
Car buyers in Europe like how Chinese EVs are not costly yet filled with features and stylish designs. Concerns about the threat to local carmakers and jobs are just not as important for some European buyers who face increased living costs.
British retiree John Kirkwood replaced his Volkswagen Passat three years ago with an MG5 station wagon. The MG5's price was much lower than the price of the nearest competitor — a Kia that cost thousands more.
“It’s nice. It’s quiet, it’s refined” and very quick, Kirkwood said, adding that he had few concerns about the Chinese ownership of the British brand.
FILE - In this photo released by China's Xinhua News Agency, laborers work at the assembly workshop of automaker SAIC Motor Company's Lingang base in Shanghai, April 23, 2022. (Chen Jianli/Xinhua via AP, File)
MG is owned by SAIC Motor, China’s biggest automaker. SAIC is the largest Chinese EV company in Europe too. Another Chinese automaker, BYD, is growing fast. Other companies with complete or partial Chinese ownership include Geely, which owns Sweden’s Volvo and a number of EV brands including Polestar, Lynk & Co. and British sports car maker Lotus.
Chinese EV makers combined sales are a small part of the 9.2 million vehicles sold in Europe every year. But Chinese EV builders have been taking up a piece of the smaller EV market at a fast rate.
Schmidt's information suggests that Chinese automakers make up only about three percent of Western Europe’s total car market, but Chinese manufacturers have 8.4 percent of the EV market. That number is up from 6.2 percent last year. In 2019, it was almost zero.
The sales increase is leading some to worry about Europe’s automotive industry. That powerful industry is mainly centered in France and Germany and employs many workers.
Last month, European Commission President Ursula von der Leyen said, “Global markets are now flooded with cheaper Chinese electric cars,” with prices “kept artificially low by huge state subsidies.”
A subsidy is government support that permits a company to sell products at unfairly low prices.
The commission, the EU’s ｅxecutive arm, officially opened its investigation this month, saying it would take up to 13 months and could result in import duties, another word for taxes.
FILE - Passengers wait near a hybrid luxury SUV from China automaker Lynk&co displayed at the train station in Hangzhou in eastern China's Zhejiang province on Monday, July 3, 2023. (AP Photo/Ng Han Guan, File)
China voiced “strong dissatisfaction” and promised to “firmly safeguard” Chinese companies’ rights. The Chinese Commerce Ministry said the EU investigation is based on “subjective assumptions,” lacks enough evidence and goes against World Trade Organization rules.
Executives at Shanghai-based Aiways, a company headed by Volvo’s former China sales chief, rejected accusations that the Chinese government unfairly supports its businesses.
“We’re not selling inside China, we’re not being subsidized in China,” said Alexander Klose, vice president of overseas operations. Klose said his company does get “some subsidies for putting a plant somewhere,” but added that he believes that is “what everybody has in Europe.”
The EU should be working on getting to a “green future “rather than keeping competition out,” he said.
Words in This Story
battery –n. a device that chemically stores electricity for use in many kinds of devices
feature – n. an interesting or important part, quality or ability
stylish –adj. appealing or pleasing
brand –n. a name under which a product or group of products is sold
artificially – adv. created or caused by people; not happening naturally
dissatisfaction – n. a feeling of unhappiness or disapproval
subjective – adj. based on feelings or opinions rather than facts
assumption – n. something that is believed to be true but that is not known to be true
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