November 4, 2025

EU Accuses China of Over subsidizing Electric Vehicle Production

Adebayo September 15, 2023
EU Accuses China of Over subsidizing Electric Vehicle Production

EU Accuses China of Over subsidizing Electric Vehicle Production

The European Union has accused China of over-subsidizing electric vehicle production, which is giving Chinese EV makers an unfair advantage in the European market. On Wednesday, European Commission President Ursula von der Leyen announced a probe into China’s dumping on the world market of electrical cars whose prices have been distorted by large state subsidies.

After the European Union’s executive arm abruptly launched an “anti-subsidy” investigation into China’s electric vehicle manufacturers, China accused the EU of engaging in “blatant protectionism.”.

The EU’s investigation found that China has provided billions of dollars in subsidies to EV makers in recent years. These subsidies have helped Chinese EV makers to produce cars at a lower cost than European EV makers.

The EU is concerned that Chinese EV makers are using these subsidies to undercut European EV makers in the European market. This is making it difficult for European EV makers to compete.

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The investigation “is a naked protectionist act that 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,” China’s Ministry of Commerce said in a statement.

“China will pay close attention to the EU’s protectionist tendencies and follow-up actions, and firmly safeguard the legitimate rights and interests of Chinese companies,” it added.

The West has long argued that China is injecting a disproportionate amount of public funds in its domestic industry. The aid can be very difficult to trace, with many forms including preferential lending, generous taxation and direct transfers of funds.

“Competition is only true as long as it is fair,” said Ursula von der Leyen, the president of the European Commission. “We have to be clear-eyed about the risks we face.”

“Global markets are now flooded with cheaper Chinese electric cars. And their price is kept artificially low by huge state subsidies. This is distorting our market,” she said. “And as we do not accept this distortion from the inside in our market, we do not accept this from the outside.”

The EU’s investigation into Chinese EV subsidies is the latest sign of the growing tensions between the EU and China. The two sides are also at odds over trade, technology, and human rights.

The outcome of the EU’s investigation is likely to have a significant impact on the global EV market. If the EU imposes tariffs on Chinese EVs, it could lead to a trade war between the EU and China. This could have a negative impact on the global economy.

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