Brussels will launch an anti-subsidy investigation into Chinese electric vehicles that are “distorting” the EU market, the European Commission president has said.

The probe could constitute one of the largest trade cases launched as the EU tries to prevent a replay of what happened to its solar industry in the early 2010s, when photovoltaic manufacturers undercut by cheap Chinese imports went into insolvency.

“Too often, our companies are excluded from foreign markets or are victims of predatory practices. They are often undercut by competitors benefiting from huge state subsidies,” said Commission president Ursula von der Leyen, in her annual state of the union address to EU lawmakers.

“Global markets are now flooded with cheaper electric cars. And their price is kept artificially low by huge state subsidies,” she said.

European carmakers have realised they have a fight on their hands to produce lower-cost electric vehicles and erase China’s lead in developing cheaper, more consumer-friendly models.

Ms von der Leyen stressed the importance of electric vehicles to the EU’s ambitious environmental objectives.

“So I can announce today that the Commission is launching an anti-subsidy investigation into electric vehicles coming from China. Europe is open to competition. Not for a race to the bottom,” she said. – Copyright The Financial Times Limited 2023 / Reuters

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