AutoBeta(AutoBeta.net)10/04 Report--

On October 4, the European Commission officially announced its decision to launch a countervailing investigation into pure electric vehicles imported from China.

In response, the Ministry of Commerce said that the countervailing investigation launched by the European side was only based on subjective assumptions about the so-called subsidy programs and threats of damage, lacked sufficient evidence to support it, and did not comply with the relevant rules of the WTO. China expressed strong dissatisfaction with this. The European side asked China to conduct consultations within a very short period of time and failed to provide effective consultation materials, which seriously damaged the rights of the Chinese side.

At the 10th China-EU High-level Economic and Trade Dialogue held not long ago, the Chinese side made it clear that the investigation measure to be taken by the European side is to protect its own industry in the name of "fair trade" and is a naked protectionist act. it will seriously disrupt and distort the supply chain of the global automobile industry chain, including the European Union, and have a negative impact on China-EU economic and trade relations.

China urges the European side to proceed from the overall situation of maintaining the stability of the global industrial chain supply chain and the China-EU comprehensive strategic partnership, prudently use trade relief measures, and encourage the new energy industry represented by electric vehicles to deepen cooperation, so as to create a fair, non-discriminatory and predictable market environment for the common development of China-EU electric vehicle industry. China will pay close attention to the follow-up investigation procedures of the European side and firmly safeguard the legitimate rights and interests of Chinese enterprises.

On Sept. 13, European Commission President Ursula Ursula von der Leyen announced that he would launch a countervailing investigation into Chinese electric cars because of EU concerns that Chinese car companies produce low-cost electric cars through large government subsidies, which could threaten the development of local electric vehicles when they pour into the EU market.

"the global electric car market is full of inexpensive Chinese cars whose prices are low because of huge state subsidies, which are distorting the EU market," Mr von der Leen said. Europe is open to competition, but it does not allow competition to the end. The EU must protect itself from unfair practices, but it will maintain open communication with China. What the EU needs to do is to take risks, not decouple. "

The so-called "countervailing" investigation means that when imported products enter the market at a low price at dumping prices or subsidized by the governments of exporting countries, and cause material damage or threat of substantial damage to domestic industries producing similar products, the World Trade Organization (WTO) allows members to use trade relief measures such as anti-dumping and countervailing measures, in which countervailing measures are to restrict imports or impose countervailing duties. In the countervailing investigation, the EU investigates enterprises, and if the final affirmative conclusion is reached, the trade sanctions also impose tariffs on the export goods of the enterprises under investigation, rather than on all similar goods from a country.

The EU-China Chamber of Commerce opposes the survey. "Chinese electric vehicles and upstream and downstream industrial chain enterprises continue to innovate and have accumulated overall industrial advantages in the highly competitive Chinese market. To provide consumers with high-end, cost-effective electric vehicles that can meet different needs are welcomed by consumers all over the world, including European people. This advantage is not formed by the so-called huge subsidies. "

A spokesman for China's Ministry of Commerce responded on September 14 that China expressed high concern and strong dissatisfaction with this. The Chinese side believes that the investigation measure to be taken by the EU is to protect its own industry in the name of "fair competition" and is a naked protectionist act that will seriously disrupt and distort the supply chain of the global automobile industry chain, including the European Union. and will have a negative impact on China-EU economic and trade relations.

The European Union has decided to launch a countervailing investigation into pure electric vehicles from China, perhaps because of a surge in Chinese electric vehicle exports. According to relevant data, China's car exports in the first half of 2023 were 2.14 million, an increase of 76 percent over the same period last year, surpassing Japan to become the world's number one car exporter. In the European market, China's car exports account for 39% of the total export volume. Especially in the context of the rapid development of new energy vehicles, China has become a leader in the global new energy vehicle industry, changing the inherent pattern of the world automobile industry. This has threatened the influence of European car companies in the global auto market.

The strong limelight of Chinese car companies may become the "fuse" for the final decision of the European Commission. At the 2023 Munich Auto Show, more than a dozen Chinese companies were collectively unveiled, including BYD, Zero Motor, Avita Automobile and so on. Although German local auto companies such as Mercedes-Benz, BMW, Audi and Volkswagen are still the protagonists of this auto show, but China's local auto companies are more like the key to the popularity of the Munich auto show. Some media commented on this, without the participation of Chinese auto companies, the Munich auto show may have to "stop eating".

How much impact does the EU countervailing investigation have on electric vehicles in China? It is understood that car companies exporting to Europe will become the main targets of the investigation, such as MG, smart, Xiaopeng Automobile, Lecker, etc., of which MG may be the most affected. In the first half of the year, the sales of the MG brand in the European market reached 45000, with an estimated annual sales of 100000, which is the fastest growing Chinese brand in the European market, while smart, Xiaopeng Automobile and so on have a layout in the European market. However, the overall share of the European market is not high, the impact is minimal.

To put it simply, the EU countervailing investigation of pure electric vehicles from China will not have a significant impact on the operation of Chinese car companies, because at present, Chinese car companies are not highly dependent on the EU market, but in the long run, the survey is likely to have a negative impact on Chinese car companies to expand their market share in Europe and slow down their entry into the European market.

Another impact of the EU countervailing investigation into Chinese electric cars is that Chinese car companies have to rethink their export strategies and methods. If Chinese car companies are levied countervailing duties, it could accelerate the progress of Chinese car companies to build capacity in Europe, where they cannot give up after all.

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