'Flood' of China EVs: EU begins investigation, may slap tariffs

The European Commission launched an investigation on Wednesday into whether to impose punitive tariffs to protect European Union producers against cheaper Chinese electric vehicle (EV) imports it says are benefiting from state subsidies. 

“Global markets are now flooded with cheaper electric cars.And their price is kept artificially low by huge state subsidies,” EC President Ursula von der Leyen said in her annual address to the bloc’s parliament, seen by many in Brussels as a pitch for her re-appointment for a second term. 

The Commission will have up to 13 months to assess whether to impose tariffs above the standard 10 per cent EU rate for cars in its highest profile case against China since an EU probe into Chinese solar panels narrowly avoided a trade war a decade ago.

The anti-subsidy investi- gation covers battery-powered cars from China, so also includes non-Chinese brands made there, such as Tesla, Renault and BMW. It is also unusual in that it is brought by the EC itself, rather than in response to an industry complaint. 

The Chinese Chamber of Commerce to the EU said it was very concerned.