Chinese official criticizes EU investigation into electric vehicle subsidies as ‘selective’
Employees assemble new energy vehicles at a smart factory of electric vehicle company Leapmotor on April 8, 2024 in Jinhua, Zhejiang province, China.
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BEIJING — Europe’s investigation into China’s electric cars has been so selective that the results are unreliable, a Chinese official claimed in an exclusive interview with CNBC on Monday.
The European Commission last week announced plans to impose tariffs on Chinese electric vehicle imports starting July 4. Temporary decision after a months-long investigation into the role of government subsidies for China’s electric vehicles.
China’s electric car industry has taken off After more than ten years of development. In the country, it is not only located Tesla under pressure but has pushed traditional automakers as well as startups into the fray Fierce competition in automotive technology features and price. Slowing domestic growth is also encouraging for Chinese electric car companies increase sale revenue strategy for Southeast Asiathe Middle East and Europe.
The Chinese side has made it public criticized the EU’s move and rejected accordingly accusations – including from the United States – of industrial overcapacity That puts manufacturers in other countries at risk of closing and laying off workers.
Jin Ruiting, director of the Academy of Macroeconomic Research, a research agency under the National Development and Reform Commission, said the EU’s anti-subsidy investigation only looked at Chinese companies, instead because businesses have the largest export volume. He did not specify which exporter.
The sample selection was “very selective,” Jin said in Mandarin. He said that violated World Trade Organization regulations.
WTO declined to comment.
Olof Gill, European Commission spokesman for trade and agriculture, said in a statement to CNBC.
Gill said the largest export volume was not the only criterion and the Commission also looked at domestic production and sales volumes. “The Commission considers that the model has been chosen in accordance with WTO regulations and the corresponding EU legislation on this matter,” he said.
Major German carmakers, which have significant sales from China and local partnerships, were quick to speak out against the EU’s planned tariffs.
Volkswagen Group said in a statement that it rejects “countervailing duties” and that “the timing of the EU Commission’s decision is detrimental to the current weak demand for BEVs in Germany and Europe.”
“The Volkswagen Group confidently accepts the growing international competition, including from China, and sees it as an opportunity. This also benefits our customers,” the German automaker said. know.
Volkswagen delivered 3.2 million passenger cars in China last year, more than the 3.1 million delivered to Western Europe, including the UK BMW Group also assigned more cars in China last year than in continental Europe.
Oliver Zipse, CEO of the BMW Group, said in a statement: “Protectionism risks starting a spiral: Tariffs lead to new tariffs, which lead to isolation rather than integration. work”. “In the view of the BMW Group, protectionist measures, such as the imposition of import duties, do not contribute to successful competition in international markets.”
The EU investigation includes Tesla, opened a factory in Shanghai in 2019 and exports some Chinese-made cars to other markets. Commission says Elon Musk’s automaker can receive an individual price.
Industry complaint request?
NDRC’s Jin added that the EU’s anti-subsidy investigation does not appear to be based on industry or business complaints.
“There’s a problem with [the EU’s] sample selection and I think there is a big problem with the conclusion,” he said in Mandarin, as translated by CNBC. “So I think the investigation process is not transparent and the results are not reliable.”
The EU’s Gill said the bloc’s regulations allow the Commission to start an investigation without having to receive a complaint from industry.
Last week, the Commission said its investigation had concluded that Chinese-made battery-powered cars benefited from “unfair subsidies, which pose a threat of economic damage.” for EU BEV manufacturers”.
“The Commission has therefore reached out to the Chinese authorities to discuss these findings and explore possible ways to resolve the identified issues in a WTO-compliant manner,” the statement said. . The EU statement said.
Expected tax rates range from 17.4% for BYD cars to 38.1% for state-owned electric vehicles SAIC.
Rhodium Group analysts said in an April report that tariffs would likely need to reach 40% to 50%, if not higher for BYD, to “make the European market worse.” attractive to Chinese electric vehicle exporters.”
The Biden administration announced in May it would increased import tax on Chinese electric cars from 25% to 100%. A senior administration official cited “rapidly growing exports” and “excess capacity” as reasons for the new tariffs.
EV cars and ICE cars
Jin stated that while the capacity utilization of traditional fuel vehicle companies in China is 70% to 80%, BYD and some new energy vehicle companies are 100% or higher much more.
He also pointed to a report from the International Energy Agency that predicts high demand for electric cars if the world achieves net-zero emissions in the coming decades — a demand that Jin said drives manufacturers Chinese cars are only just beginning to respond.
The IEA says to achieve net zero emissions by 2050, it predicts electric car sales will need to account for about 65% of global auto sales by 2030. That Requires average revenue growth of 23% every year until then. The agency said electric car sales rose nearly 35% in 2023 compared to the previous year.
Jin claims that oversupply is the reason why global trade exists and that if China produces too many electric cars, other countries will dominate exports of liquefied natural gas, agricultural products and high-end semiconductors globally.
Overall, Jin emphasized the need for global cooperation rather than risk mitigation, despite what he called short-term gains for some politicians.
Beijing has repeatedly asked the Biden administration to lift restrictions on US sales of advanced semiconductors to China.
– CNBC’s Rebecca Picciotto contributed to this report.
