Von der Leyen announces Chinese EVs inquiry in competitive bid

Von der Leyen announces Chinese EVs inquiry in competitive bid
Ursula von der Leyen SOTEU

One of two initiatives announced today to maintain Europe’s place in the global race to net zero, European Commissioner Ursula von der Leyen has announced an inquiry into electric vehicles (EVs) coming from China.

“Europe will do whatever it takes to keep its competitive edge.”

So said von der Leyen during her 2023 State of the European Union (SOTEU) address, announcing the EVs inquiry as one of two inititiatives to do just that, the other being a support package for the Union’s wind sector.

State of the EU

Referring to the importance of the European Green Deal at the start of her term in 2019, von der Leyen led her State of the Union address with the importance of the energy sector in enhancing Europe’s position as a competitive global player.

“Four years ago, the European Green Deal was our answer to the call of history and this summer, the hottest ever on record, was a stark reminder of that.”

Referencing the extreme wildfires and flooding experienced this year in Greece and Spain, as well as chaotic extreme weather in Bulgaria and other member states, von der Leyen emphasised how, although much has been done towards net zero, “our work is far from over.

“This is the reality of a boiling planet. The European Green Deal was born out of this necessity to protect our planet, but it was also designed as an opportunity to preserve our future prosperity.”

EV inquiry

This initiative, placing Europe again on the map against global energy competition majors such as the US and China, has been in the works through 2023 via tabled policies such as the Net-Zero Industry Act and the Critical Raw Materials Act.

However, although placing Europe on the map as a leading energy player will be key, von der Leyen also cautioned against isolating competitors:

“Our industries and technology companies like competition. They know that global competition is good for business and that it creates and protects jobs here in Europe. But competition is only good as long as it is fair.”

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Hence, the investigation into imported electric vehicles (EVs):

“Take the EV sector. It is a crucial industry for the clean economy with a huge potential in Europe, but global markets are now flooded with cheaper Chinese electric cars; their prices kept artificially low by huge state subsidies.

“This is distorting our market and as we do not accept this distortion from the inside of our market, we do not accept this from the outside.

“I can announce today that the Commission is launching an anti-subsidy investigation into electric vehicles coming from China (…) Europe is open to competition, but not for a race to the bottom.”

This, adds von der Leyen, is part of a strategy to “de-risk, not decouple” trade practices in the EU, a way to boost the Union’s competitiveness while retaining beneficial relations.

According to Reuters reportage, one of many reactions to the announcement of the EVs inquiry was from Sigrid De Vries, head of the European Automobile Manufacturers’ Association (ACEA), who commented on how “China’s apparent advantage and cost-competitive imports are already impacting European auto makers’ domestic market share, with a massive surge in electric vehicle imports in recent years.

“Von der Leyen’s announcement is a positive signal that the European Commission is recognising the increasingly asymmetric situation our industry is faced with, and is giving urgent consideration to distorted competition in our sector.”

Also commenting was Germany’s VDA Automotive Industry Assocation, which cautioned how “damage must be causally quantifiable and the community interest must be taken into account. Possible backlash from China must also be taken into account.

“One thing is clear: an anti-subsidy investigation alone will not help to solve the existing challenges with regard to the competitiveness of the European landscape. Policymakers in Brussels and Berlin must create the framework conditions to ensure that the transformation succeeds.”

The other initiative is focused on the wind sector, which has been “facing a unique mix of challenges and this is why we will put forward a European wind power package, working closely with industry and member states.”

The package, according to von der Leyen, will go towards fast-tracking permitting, improving the Union’s auction systems, boosting skills and supply chains and enabling eased access to finance.