EU takes action against cheap Chinese EVs, which we are increasingly considering

By Aafke Eppinga

The EU is conducting a study to determine whether to impose punitive tariffs to protect European manufacturers from Chinese EV imports that benefit from state aid. Meanwhile, France is introducing new financial incentives for EV purchases starting in 2024 to support the local and European auto industry and reduce dependence on Chinese cars.

European Union investigates Chinese EV subsidies

The European Commission has launched an investigation to determine whether punitive tariffs should be imposed to protect European manufacturers from Chinese EV imports. The investigation, which could last up to thirteen months, focuses on battery-powered cars from China, including non-Chinese brands such as Tesla, Renault, and BMW. “World markets are now flooded with cheaper electric cars. And their price is kept artificially low by huge state aid,” said Ursula von der Leyen, the European Commission president.

Chinese EV manufacturers are expanding into foreign markets, and their share of the European EV market has risen to eight percent this year, and may even reach fifteen percent by 2025. However, the Chinese Chamber of Commerce to the EU objected to the study. Despite concerns about possible state support for Chinese EV producers, one in six Dutch people are considering buying a Chinese electric car, a survey by research firm Multiscope showed. Moreover, 34.7 percent of those surveyed believe that Chinese electric cars are not inferior to European brands in terms of quality.

The survey results suggest that price is an important factor for Dutch consumers. Almost 42 percent would choose a Chinese car if it is significantly cheaper but offers the same quality. Nevertheless, 27.1 percent of respondents experience moral objections to buying a Chinese car, while 39 percent say they have no problem with this.

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France introduces ‘green bonus’ for EVs

While the EU is scrutinizing China’s EV subsidies, France, meanwhile, is taking steps to boost the local and European auto industry. Starting in January 2024, the country will introduce new financial incentives for the purchase of EVs. This “green bonus” will take into account the life cycle of the car and its components, including the electric battery.

Each EV will receive a “green score” to promote the production of EVs in France and the EU. The bonus can reach €7,000 for poorer households, and €1 billion has been set aside to finance it. However, EVs made in China using coal-generated electricity, such as Dacia Spring and China MG, are not eligible for the green bonus.