Investigation launched into cheap Chinese electric vehicle imports

European Commission president Ursula von der Leyen launched an anti-subsidy investigation against Chinese imports of electric vehicles (EVs) yesterday (Wednesday, September 13). 

The Commission fears that, without countermeasures, Chinese companies will gain a stranglehold on EV markets.

Chinese EVs still represent only a small share of the bloc’s market, but they are rising fast and could hit 15% within two years.

The Commission’s investigation, which will be conducted by its trade department, will need to prove that China is subsidising companies exporting EVs to the EU and that this is causing injury to the European industry. 

"Global markets are now flooded with cheaper Chinese electric cars and their price is kept artificially low by huge state subsidies,” said von der Leyen in her annual State of the Union address. “This is distorting our market.”

China has attacked the anti-subsidies investigation into China’s electric car industry, labelling it a “naked protectionist act” and warned that it will have a negative impact on relations.

China’s commerce ministry vowed to protect the “legitimate rights” of its companies and reminded the EU of the strong presence and long history of European producers in the world’s second-largest economy.

“It is a naked protectionist act that will seriously disrupt and distort the global automotive industry supply chain, including in the EU, and it will have a negative impact on China-EU economic and trade relations,” the ministry said in a statement.

Manufacturers can ‘compete with the Chinese’

The investigation’s launch comes as Transport and Environment (T&E) claims that European manufacturers can compete with the Chinese influx of small B-segment EVs.

Carmakers, it says, can sell small electric cars made in Europe for €25,000 (£21,500) while making a profit.

Falling production costs and battery prices would make mass market B-segment vehicles feasible to electrify by 2025, according to the study by T&E based on analysis by the Syndex consultancy.   

T&E said the availability of smaller, more affordable EVs could be a game changer for mass adoption of electric cars and will be crucial if European carmakers are to hold off the challenge of Chinese companies surging into Europe.

European manufacturers, it says, can make a reasonable 4% profit margin on a small battery electric vehicle produced in Europe in 2025, according to the report’s ‘favourable market conditions’ scenario.

This would see battery costs fall to $100 per kWh, in line with forecasts by BloombergNEF and others.

The report factors in other direct cost reductions while keeping broad industry expectations around indirect costs and mark-ups. The B-segment vehicle would have a 40 kWh LFP battery and a range of 250-300 km (155-186 miles). 

Julia Poliscanova, senior director for vehicles and emobility supply chains at T&E, said: “Survey after survey has shown prices are one of the biggest barriers to drivers going electric. The €25k small BEV will be a game changer for public adoption of electric cars.

“Bringing those models to market quickly and in volumes is crucial for European manufacturers to compete with Chinese rivals which are already offering cheap, small electric cars here.”

The arrival of more affordable, small electric cars would hasten the uptake of zero-emission cars in Europe, a new survey shows.

One-quarter (25%) of new car buyers already intend to buy an electric car in the next year, according to a YouGov poll for T&E in France, Germany, Italy, Spain, Poland and the UK.

But when given the option of a small €25,000 electric car, the share of new car buyers willing to buy a battery electric model increases to 35%. This would equate to an additional 1 million EVs being sold in Europe annually, replacing combustion equivalents.