The President of the European Commission on Tuesday criticized competition from “heavily subsidized foreign players” in the European Union (EU), hinting that Chinese electric cars are selling cheaper than European ones, vowing to end “unfair practices”.
“When it comes to unfair competition, our European companies too often face competition from heavily subsidized foreign players. Think about the automobile industry. […]but at the same time, global markets are flooded with cheap Chinese electric cars, their prices kept artificially low by huge government subsidies,” said Ursula von der Leyen.
Speaking at the European Green Pact summit in the Czech capital Prague, the leader of the community executive argued that this was the reason the EU was moving forward with its investigation into subsidies for electric cars from China announced in the middle of this month.
“European companies will always be ready for real competition – competition in terms of economic efficiency and quality – but it must be fair, and we will protect European companies from unfair competition,” he promised.
These statements by Ursula von der Leyen came at the end of a trip by European Commission Executive Vice-President Valdis Dombrovskis to China, during which the person in charge asked Beijing for cooperation in an open investigation. Brussels has introduced allegedly illegal Chinese subsidies to the electric vehicle sector, according to European sources.
There are currently commercial tensions between Brussels and Beijing, as two weeks ago Community Executive President Ursula von der Leyen announced the launch of an investigation following a year-long collection of evidence by the institution’s services.
The day after the investigation was announced, China expressed “grave concern and strong dissatisfaction,” accusing the EU of “a blatant act of protectionism in the name of fair competition.”
According to the European Commission, Chinese electric cars, which recently entered the EU, already account for 8% of the total market, while being 20% cheaper compared to European competitors.
China, which has become an economic power, has put forward a robust public investment strategy that the EU disputes as affecting competition.
We are talking about large subsidies to Chinese companies investing abroad, mainly in strategic industries.
Data from the China Association of Automobile Manufacturers shows that China’s electric vehicle exports more than doubled (+110%) between January and August.
Almost six million electric vehicles were sold in China last year, more than all other countries in the world combined. The size of the Chinese market and strong government support have led to the rise in popularity of local brands including BYD, NIO or Xpeng.
ANE (JPI) // APN
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