EU's tariff hikes on EVs hampers industry growth

Editor’s note: Zhang Chao, associate researcher at the Institute of European Studies of the Chinese Academy of Social Sciences. The article reflects the author's opinions and not necessarily the views of CGTN.

Recently, the European Commission announced plans to start customs registration of pure electric vehicles (EVs) imported from China. This is part of the EU's "anti-subsidy investigation" into Chinese electric vehicles. If the investigation finds that Chinese EVs receive "unfair subsidies," the EU may impose "retroactive tariffs" on these registered imported vehicles.

This move by the EU is good to none but worse to itself. While the EU positions itself as a "leader" in global green transformation and climate change response, it is still far from achieving its goal of zero carbon dioxide emissions for all new vehicles sold by 2035. In 2023, only 14.6 percent of cars sold in the EU were pure EVs. Attempting to prevent Chinese EVs from entering Europe through the so-called "anti-subsidy investigation" will only hinder the EU's green transformation process.

This action of the EU reflects its own lack of competitiveness within the EV industry. In 2023, among the world’s top 10 EV brands, China's BYD and the U.S.'s Tesla significantly outpaced European competitors. At the same time, Chinese EVs are gradually entering the European market, posing tremendous competitive pressure on European automakers. Implementing customs registration measures while conducting the so-called "anti-subsidy investigation" will severely impact EU automakers. 

On a deeper level, the EU's anti-subsidy investigation and customs registration measures against Chinese EVs represent the specific implementation of the EU's "de-risking" policy towards China. Since the European Commission President Ursula von der Leyen introduced the term "de-risking" in March 2023, this concept has faced widespread questioning and criticism due to its ambiguity. By using this term, the EU almost equates "China" with "risk," subjecting normal China-EU economic and trade cooperation to scrutiny under the "de-risking" microscope. This logic of the EU that resembles a "presumption of guilt" has severely affected China-EU cooperation, with the EV industry being the latest victim of this EU policy.

In fact, in the EV industry, the development of Chinese companies may expedite the transformation process of European companies, propelling mutual cooperation and complementarity in the field of EVs. In recent years, not only European brands like Volkswagen and Audi have expanded production capacity and sales networks in China, but Chinese EV-related companies such as CATL and BYD have also invested and established factories in Europe. This demonstrates that China and the EU are highly complementary in the EV industry chain. 

The EU should not be overly sensitive to China and has no reason to view Chinese EVs as a "risk." Green transformation and the development of the EV industry are in the common interest of both China and the EU, and both parties should work together to expand cooperation in the EV industry and share the dividends of green development.