EU to Take Action Against Manufacturers of Cheap Chinese Electric Vehicles

The President of the European Commission, Ursula von der Leyen, has announced the commencement of an investigation into the practice that China employs, providing substantial subsidies to its electric vehicle manufacturers to artificially lower their prices in the European market. This information was reported by Bloomberg.

China's subsidies contribute to the artificial reduction of prices for Chinese electric vehicles in Europe, disrupting competition in the European automobile market and posing a threat to European Union automakers.

"Their prices are artificially kept low through massive state subsidies. This distorts our market. Since we do not take such measures internally for European manufacturers, we will take them externally," said the head of the EU executive branch in her annual speech to the European Parliament.

Now, as demand on China's domestic market is declining, Chinese automakers are preparing to increase supplies of their vehicles abroad, including to Europe. Companies like BYD and Nio have already announced their intentions to boost sales in the EU by introducing affordable new electric vehicle models.

The increased supply of Chinese vehicles could impact European automakers such as Stellantis NV and Volkswagen.

BYD is actively marketing its electric vehicles in 15 European Union countries. Their Atto 3 model became exceptionally popular in Sweden in July of this year. By the end of the year, BYD plans to start selling the Seal model in the EU for 45,000 euros, competing directly with the Tesla Model 3 and several Volkswagen models.

France became the first EU country to recognize the threat posed by cheap Chinese imports of electric vehicles. To protect its automotive industry, the French government has developed a program of state bonuses for buyers of French electric vehicles. Additionally, France is trying to persuade Germany to implement similar measures.

This year, the EU temporarily revised its rules for providing state aid to counter massive subsidies provided by the United States and China, particularly in the field of green technologies. The EU is particularly concerned about China's economic practices and has called on Beijing to open its market to rebalance bilateral trade relations and introduce new tools to combat China's restrictive policies aimed at countries like Lithuania.