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September 2023

EU announces anti-dumping investigation into Chinese electric cars

Enrica Lazzarini

The investigation is aimed to asses any possible state subsidies resulting in unfair competition and distortion of the free market operated by China, with the possibility of introducing duties
 "I can announce today that the Commission is launching an anti-subsidy investigation into electric vehicles coming from China. Europe is open for competition. Not for a race to the bottom." European Commission President Ursula von der Leyen announced the launching of the anti-dumping investigation into Chinese electric cars during her annual State of the Union address, as part of her strategy to promote the energy transition and competitiveness of the European automotive industry.

The investigation, led by the European Commission and conducted in cooperation with member States, aims to investigate Chinese business practices within the electric car sector: the main objective is to ensure a level playing field and compliance with international trade regulations.
'Global markets are now flooded with cheaper electric cars. And their price is kept artificially low by huge state subsidies. This is distorting our market. And because we do not accept it from within, we do not accept it from outside'.

The investigation will focus on alleged dumping practices, i.e. the sale of products at prices below production cost, by Chinese car companies within the European market. This behaviour could jeopardise the competitiveness of European companies in the electric car sector, which are trying to expand and contribute to the transition to cleaner energy.
Another crucial aspect of the investigation will be the analysis of state subsidies and incentives granted to Chinese companies for the production and export of electric vehicles. The European Commission will try to determine whether these distorting practices have had a negative impact on the European market.

The survey is an important move by the EU to defend its economic interests and promote the transition to more sustainable vehicles. Europe has emphasised the need to reduce carbon emissions and accelerate the adoption of electric vehicles as part of efforts to combat climate change.
The Chinese automotive sector has seen significant growth in recent years, becoming one of the world's leading producers of electric vehicles. This investigation could increase trade tensions between the EU and China as both regions seek to consolidate their leadership in the electric car market.

It is important to underline that the anti-dumping investigation is a complex process and will take time before reaching a conclusion. In the meantime, the EU will continue to promote its energy transition agenda and seek a balance between promoting the competitiveness of the European automotive industry and maintaining constructive international trade relations.

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