European Union has evidence of unfair subsidies for Chinese EVs

In September last year it became clear that the EU will not simply accept the flow of electric cars from China. The Union launched an investigation into possible ‘dumping’ by Chinese companies, which, with the help of the deep pockets of the Chinese government, would release too many cars at too low a price on the European market.

Six months have now passed and, according to the investigative committee, there is indeed an unfair competitive position. There is ‘sufficient evidence’ to state that Chinese brands are indeed being helped by the government of the People’s Republic of China. Broadly speaking, this is done in three different ways:

• By direct transfer of money or goods from the government to the companies in question
• By not collecting income to which the government is entitled (such as taxes)
• By the government supplying goods or services for an unrealistically low fee.

A so-called implementation regulation has now ordered electric passenger cars originating from China to be provided with a special registration. This is also done because, according to the interim report, urgency is required. In the period October 2023 to January 2024, 177,839 Chinese EVs were imported into the EU, 14 percent more than a year earlier in this period. According to the EU, there is sufficient reason to assume that the often subsidized Chinese companies are causing serious damage to the European car industry.

The registration of Chinese EVs makes it possible to quickly introduce any import tax, even retroactively. The fact that this is not yet happening is partly due to the fact that the precise extent of the market-distorting subsidies has not yet been properly mapped out. In the coming period, the parties involved can share their views with the investigative committee and only after all those views have been sufficiently weighed can any measures be taken. These may therefore also apply to EVs that have already been imported and registered previously