Recently, the European Union opened an investigation into state subsidies for Chinese electric cars. This investigation, announced by European Commission President Ursula von der Leyen, aims to assess the impact of these subsidies on the European market and to protect European industry in the face of what are considered to be “artificially low” prices.

The European Commissioner for the Internal Market, Thierry Breton, recently suggested that this could lead to a significant increase in customs duties on Chinese electric vehicles.

According to Thierry Breton, who spoke in an interview with the French TV channel LCI, such investigations usually lead to increase in customs duties by approximately 10-20%. However, he also emphasized that the outcome of this procedure has not yet been determined, and repeatedly stated: “Let’s see.”

Will Chinese electric cars soon become more expensive in Europe?

The main concern of the European Union is that Chinese subsidies have created a large competitive advantage for Chinese car manufacturers, making their electric cars much cheaper than their European counterparts.

Currently, there is already a 10% tariff on electric cars from China, but for comparison, in the US this figure rises to 27.5%. This difference in cost creates serious distortions in the international electric car market.

During the investigation, European authorities will scrutinize direct and indirect subsidies received by Chinese manufacturers. These discussions will apply to all cars made in China, regardless of brand. Experts evaluate that the cost of Chinese cars compared to those produced in Europe is about 20%which raised concerns about the long-term viability of the European car industry.

Beijing’s answer to Europe

Beijing, for its part, strongly defends its state subsidies and considers the European initiative as such an act of protectionism. China says the subsidies are the result of significant investment in the sector and should not be questioned. According to the Chinese government, this is an investigation “will have a negative impact on economic and trade relations between China and the European Union. »

China has gained a significant advantage in the electric vehicle sector, especially when it comes to battery technology. Chinese manufacturers have taken advantage of their huge domestic market to develop their expertise and benefit from significant economies of scale. This allowed Chinese brands to establish themselves in the international arena, seriously competing with traditional manufacturers in Europe.

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