People visit the booth of ZF during the 2023 International Motor Show, officially known as the IAA MOBILITY 2023, in Munich, Germany, September 5, 2023. /Xinhua
Chinese electric vehicles have come under spotlight recently following the European Commission's announcement that it was initiating an anti-subsidy investigation into them. The probe's outcome will determine whether to impose punitive tariffs against them.
The move shows that the European Union (EU) intends to increase the competitiveness of its local car companies' products by increasing barriers on imported products, said Zhou Mi, senior research fellow at the Chinese Academy of International Trade and Economic Cooperation.
"If the investigation does result in a tax increase, it will certainly change the cost of imported cars in the short term, and the current price gap may narrow," Zhou told CGTN during an interview.
"European consumers are very likely to face higher car prices if China's competitive advantage in the European market is weakened due to this anti-subsidy probe," he said.
Hearing the news, the Chinese Ministry of Commerce, business organizations and auto and law specialists have strongly denounced the move, and expressed deep concern about the future of the global EV industry. Both European and U.S. brands will be affected by the probe as they dominate European sales.
Germany, Europe's automotive powerhouse, strongly opposes the probe. The German Association of the Automotive Industry (VDA) argued that an exclusive reliance on anti-subsidy investigations does not address Europe's pressing competitiveness challenges.
"The European consumer will certainly lose. I think everybody loses when you put these measures in place," said Daniel Gros, director of the Institute for European Policymaking at Bocconi University in Italy.
"But they also serve as a way to wake up the European industry, so that they get more competitive, and produce better and cheaper cars," Gros told CGTN.
An electric car booth of BMW at the 2023 World Intelligent Connected Vehicles Conference, Beijing, China, September 21, 2023. /CFP
The decision will seriously disrupt and distort the global automotive industry and supply chain, including the EU, and will have a negative impact on China-EU economic and trade relations, the Chinese Ministry of Commerce said earlier in a statement.
On Tuesday, the China Association of Automobile Manufacturers said it expects the EU to be prudent in the anti-subsidy probe into Chinese EVs to avoid undermining the mutually beneficial development momentum in the industrial chains of the two sides.
Calling the probe a practice of pure protectionism in the name of fair competition, the association said the move will bring negative impacts to the global vision of carbon neutrality.
William Li, CEO of Chinese electric vehicle maker Nio, said competition has been essential in the development of China's new energy vehicle industry and beneficial to consumers as well as global sustainable development.
Li expressed hope that all countries could have an open attitude rather than be isolationist at a media round table last week.
"Chinese carmakers should prepare related materials or evidence for necessary legal efforts while they oppose such actions," research fellow Zhou noted, adding that the investigation may also speed up the globalization of some Chinese car companies.
Bilateral trade between China and the EU reached a record high of $847.3 billion in 2022, representing a year-on-year growth of 2.4 percent.
China's Ministry of Commerce said the 10th China-EU High-level Economic and Trade Dialogue on Monday was "pragmatic, candid and productive" and the two sides reached a series of outcomes and consensus on multiple issues, such as macroeconomic policy coordination, industrial and supply chains cooperation, business environment improvement.