China’s electric vehicle imports to EU hit record level amid Brussels subsidy probe
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Exports topped US$2 billion for the first time in October, according to calculations based on detailed data released by the Chinese customs authorities on Monday.
They were up 32.25 per cent from the same month last year, and almost double the value of shipments made in September this year.
Brussels officials are proceeding with an investigation into what they believe to be heavy Chinese government subsidies for EV makers, which they say are leaving manufacturers in Europe at a disadvantage.
There are also mounting concerns about overcapacity issues in China, connected to sluggish demand in the world’s second largest economy, which could see more cheaper Chinese-made goods landing in the European market.
“There is clear overcapacity in China, and this overcapacity will be exported. Especially if overcapacity is driven by direct and indirect subsidies,” European Commission President Ursula von der Leyen said last week.
China EV makers hit by EU probe, which some say may hurt decarbonisation efforts
China EV makers hit by EU probe, which some say may hurt decarbonisation efforts
“This will worsen as China’s economy slows down, and its domestic demand does not pick up. This distorts our market. And as we do not accept distortion from the inside, we should not accept it from the outside either.”
He said China has the capacity to produce 50 million cars while there is only domestic demand for 23 million units, also pointing to a “big discrepancy” between a production capacity of 100GW for wind-powered energy and domestic demand of 47GW.
“I am nervous that on current trajectory we will see much more of this. I’m afraid that sparks will fly in 2024 and that’s the reason we say we need to talk about it now, before things get out of hand,” Eskelund said.
![European Commission President Ursula von der Leyen has warned of over-capacity in the Chinese economy. Photo: EPA-EFE](https://cdn.i-scmp.com/sites/default/files/d8/images/canvas/2023/11/20/22b83ba0-9008-4df4-beae-f150461c1e14_cf9274c4.jpg)
Probes have also been announced into alleged Chinese dumping of titanium dioxide and mobile access equipment used in the construction maintenance sector. Others have been mooted for subsidies in sectors such as medical devices, solar photovoltaic equipment, metals and wind turbines.
The EV probe is focused on three Chinese companies: BYD, SAIC Motor and Geely, owner of the Volvo brand.
Should the EU investigation turn up evidence of subsidies, the bloc would calculate an average countervailing duty to be applied to all EV imports from China – including cars made in China by Tesla and European-owned manufacturers such as Volkswagen and BMW, it was understood.
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This also means the average subsidy applied across the board could be higher than had international firms been part of the EU investigation’s sample.
Tesla, which has not been included in the sample, is the by far the largest exporter of EVs from China to Europe, and lobbied to be part of the probe so that it could face lower duties based on its own subsidies, rather than the higher average rate.
“The commission’s decision to exclude from the sample the by far largest exporting producer is entirely unprecedented and untenable,” Tesla’s lawyers wrote to the European Commission, according to Politico.
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