The European Commission has decided to impose provisional anti-subsidy duties on imports of electric vehicles manufactured in China

On 12 June 2024, based on preliminary findings from an anti-subsidy investigation launched last year, the European Commission has decided to impose provisional countervailing duties on imports of electric vehicles manufactured in China. The investigation will continue for several months until the Commission determines whether to propose definitive countervailing measures. Member States will then vote on such proposals. According to a statement from the European Commission, these duties will be levied on top of the existing 10% EU tariff. This brings the total tariff rate close to 50%. The decision to impose these provisional duties follows an investigation into whether Chinese electric vehicle manufacturers receive state subsidy support.

The European Commission, the EU’s executive arm, launched the investigation last October to determine whether Chinese electric vehicle prices are artificially low due to subsidies that harm European automakers. China’s rapidly developing electric vehicle industry has become a significant player in the global market. The EU believes that Chinese electric vehicle manufacturers may benefit from unfair subsidies, which undermine the competitiveness of EU automakers.

“ACEA Director General Sigrid de Vries stated: Free and fair trade means ensuring a level playing field for all competitors, but this is only one vital component of the global competitiveness challenge. For the European automotive industry to be globally competitive, what is most needed is a robust industrial strategy for electric vehicles. By value of EU car exports, China is the third-largest market after the United States (first) and the United Kingdom (second). In 2023, China exported 438,034 pure electric vehicles to the EU, valued at €9.7 billion. In 2023, the EU exported 11,499 pure electric vehicles to China, valued at €852.3 million. Over the past three years, the market share of Chinese-manufactured vehicles in EU battery electric vehicle sales has risen from around 3% to over 21.7%. Chinese brands account for approximately 8% of this market share (data cited from: European Automobile Manufacturers’ Association).