- Paris has announced measures to provide subsidies for new electric cars based on the manufacturers’ emissions output.
Brussels has said it will investigate China’s electric car subsidies and vows to defend Europe’s industry against artificially low prices. The European Union chief, Ursula von der Leyen, said this during a speech at the European Parliament in Strasbourg.
He said that global markets are now flooded with cheaper Chinese electric cars, with the price kept artificially low by huge state subsidies. This could lead the European Union to impose duties on those cars that it believes are unfairly sold at a lower price, thereby undercutting European competitors. The European Commission president said Europe is open for competition but not for a race to the bottom.
France reportedly pushed von der Leyen to launch the investigation, but Europe has growing concerns about how much the continent relies on Chinese products. Last week, the European Commission’s internal market chief, Thierry Breton, warned about a trend emerging where Europe was being relegated to net imports of electric vehicles or solar panels.
According to some experts, China could overtake Japan to become the world’s largest car manufacturer this year. France is particularly concerned that Europe will fall behind if it is not more assertive when confronted with China’s more protectionist actions. Paris has announced measures to provide subsidies for new electric cars based on the manufacturers’ emissions output. This would be more difficult for Chinese cars since their production often relies on coal-powered electricity.
Von der Leyen has called on the EU to define its own approach to Beijing, although some of Europe’s larger powers want to be cautious to avoid severing business ties. Despite her strong comments, von der Leyen said it was vital for Europe to maintain communication and dialogue with China.
Von der Leyen added, “Because there are also topics where we can and must cooperate. De-risk, not decouple. This will be my approach to the Chinese leadership at the EU-China Summit later this year.”