Experts: EU probe into Chinese EV imports baseless

Vehicles from Chinese brands wait to be exported from a port in Suzhou, Jiangsu province. (Photo provided to China Daily)

Probe: EU's move seen as blatant act of protectionism

The European Union's decision to launch an investigation into Chinese electric vehicle imports will harm both sides, disrupting normal China-EU industrial and supply chain cooperation in the sector, said experts and industry insiders.

The investigation is groundless, unilateral and unfair, and the EV industry — along with China's manufacturing sector in general — must prepare for "a hard fight" against more possible containment moves by Western countries in the near future, they said.

China's EV industry will continue to boom and gain a stronger overseas presence, thanks to the country's competitive edge in the EV value chain, especially in batteries, they added.

Their comments came after Ursula von der Leyen, president of the European Commission, the bloc's executive branch, told EU lawmakers in Strasbourg, France, on Wednesday that the EU is launching an investigation into "huge subsidies" that China allegedly provides to its electric vehicle makers.

"The Chinese EV industry's success has its roots in China's significant edge in the EV industrial chain, which has been built up over the years under sufficient market competition, not because of the so-called 'subsidies'," said Cui Dongshu, secretary-general of the China Passenger Car Association.

"The EU should hold an objective view on the development of China's EV industry, rather than using unilateral economic and trade tools to obstruct the sector's development or increase operating costs for Chinese carmakers," Cui said.

In a statement on Thursday, the Ministry of Commerce expressed serious concerns and strong dissatisfaction over the EU's probe announcement.

This is a blatant act of protectionism under the disguise of "fair competition", which will severely disrupt and distort the global automotive industrial and supply chains, including that of the EU, the ministry said, adding that it will also have a negative impact on China-EU economic and trade relations.

Yang Jing, director of China Corporate Research at Fitch Ratings, said that the key competitiveness of Chinese EV brands originates from their understanding of what buyers need and their capability to deliver such products or upgrades in a very short period of time, as well as competitive prices, which are backed by the complete, efficient and cost-effective Chinese auto supply chain.

Zhang Yansheng, chief researcher at the China Center for International Economic Exchanges, pointed out that the EU has acted purely out of "trade protectionism".

Underscoring that external pressures will only motivate China to forge a stronger domestic manufacturing industry, Zhang warned that the investigation might be just the start of a series of containment moves by the EU — and the United States — to hamper the development of the Chinese EV industry.

Yang, from Fitch Ratings, said the dominance of Chinese companies across the global EV value chain is set to be challenged by regulatory hurdles in the overseas market.

Europe and Southeast Asia are two major export destinations for Chinese new energy vehicle makers, according to the China Association of Automobile Manufacturers.

In the first eight months of this year, a total of 727,000 NEVs were shipped overseas from China, up 110 percent year-on-year. However, data from the International Energy Agency showed that Chinese EV exports only accounted for 16 percent of those sold in Europe in 2022.

Moreover, most electric vehicles that China exported to the EU last year were cars of US and European brands made in China, while Chinese brands accounted for 40 percent of the exports, according to a report by Fitch Ratings.

The China Chamber of Commerce to the EU said in a statement on Wednesday that manufacturing each electric vehicle involves the collaborative efforts of tens of thousands of suppliers from around the world.

The EU's commitment to market openness must be translated into tangible measures, ensuring a fair, impartial and nondiscriminatory business environment for foreign companies, according to the statement. Efforts to restrict products solely based on their country of origin will run counter to the EU's commitments to the World Trade Organization, it added.

Volkswagen AG, the largest carmaker in Europe, said strong competition gives consumers positive signals.

"When you have strong competition, you have to improve yourself; you can't rest on what you have achieved," Oliver Blume, chairman of Volkswagen's board of management, told China Daily.

"I am a supporter of worldwide trade, because that is a big advantage for all countries to bring wealth, to improve the economic situation of each country. That is, at the end, a benefit for all people. Therefore, ... competition is welcomed from my point of view."