EU hits China with electric vehicle subsidy probe, weighing tariffs
Reuters, 13 September 2023
Global auto sector braces for Chinese EV tsunami
Radio Free Asia, 9 September 2023
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Global auto sector braces for Chinese EV tsunami
Radio Free Asia, 9 September 2023
Western auto-sector bosses fret about a wipeout driven by oversupply and cut-throat pricing.
The number of Chinese automakers at the International Automobile Association Mobility Conference in Munich this week has spooked some European auto sector bosses.
“It’s a Chinese takeover,” came the text from an alarmed senior executive, standing amid a vast array of gleaming Chinese vehicles at the show, reported sector analyst Michael Dunne on social media.
“China invades Germany,” said another auto watcher.
“China could be exporting 9 million cars a year by 2030,” Dunne, who heads an EV market consultancy, added.
As the world watches China’s broader economy slump amid post-pandemic weak demand, with consumers and businesses paying down debt rather than spending, at least one sector in the Chinese economy gives every appearance of operating in overdrive.
Commenting on a Wednesday New York Times article, economist and Carnegie Endowment senior fellow Michael Pettis said in a thread on X, formerly known as Twitter: “Overall exports of Chinese goods, everything from furniture to consumer electronics, slumped 5.5 percent in the first eight months of this year. But this year, exports of cars surged 86 percent through July.”
China’s auto sector – in particular electric vehicles (EVs) – is expanding at such breakneck speed that competitor manufacturers everywhere from Germany to South Korea are lamenting that the entire sector faces being flooded and going into crisis.
Auto powerhouse Germany is “losing its competitiveness” and is now in “an acute situation in which investments have to be made,” said Hildegard Mueller, president of the German Association of the Automotive Industry, to attendees of the Munich AII on Tuesday.
Demand for Chinese-made affordable vehicles, both gasoline- and electric-driven is such now that “the biggest obstacle to selling more abroad is a lack of specialized ships to carry them,” the New York Times reported.
The report continued that a building frenzy is underway in shipyards along China’s Yangtze River, manufacturing “floating parking lots” that can carry 5,000 cars at a time to markets worldwide.
EU hits China with electric vehicle subsidy probe, weighing tariffs
Reuters, 13 September 2023
BRUSSELS, Sept 13 (Reuters) – The European Commission launched an investigation on Wednesday into whether to impose punitive tariffs to protect European Union producers against cheaper Chinese electric vehicle (EV) imports it says are benefiting from state subsidies.
“Global markets are now flooded with cheaper electric cars. And their price is kept artificially low by huge state subsidies,” European Commission President Ursula von der Leyen said in her annual address to the bloc’s parliament, seen by many in Brussels as a pitch for her re-appointment for a second term.
The Commission will have up to 13 months to assess whether to impose tariffs above the standard 10% EU rate for cars in the its highest profile case against China since an EU probe into Chinese solar panels narrowly avoided a trade war a decade ago.
The anti-subsidy investigation covers battery-powered cars from China, so also includes non-Chinese brands made there, such as Tesla, Renault and BMW. It is also unusual in that it is brought by the European Commission itself, rather than in response to an industry complaint.
Tensions between China and the EU have been growing, partly due to Beijing’s closer ties with Moscow after Russia’s invasion of Ukraine. The EU is seeking to reduce its reliance on the world’s no. 2 economy, particularly for materials and products needed for its green transition.
European carmakers have realised they have a fight on their hands to produce lower-cost electric vehicles and erase China’s lead in developing cheaper models.
Chinese EV makers, from market-leader BYD to smaller rivals Xpeng and Nio , are stepping up efforts to expand overseas as competition intensifies at home and domestic growth eases. China’s auto exports surged 31% in August following a 63% jump in July, China Passenger Car Association (CPCA) data showed.
The average retail price of a Chinese-brand electric car in Germany was 29% lower than the average for non-Chinese EV models, not counting incentives or discounts, according to Jato Dynamics, while 32% lower in France and 38% lower in the UK.
The European Commission said China’s share of EVs sold in Europe has risen to 8% and could reach 15% in 2025, noting prices are typically 20% below EU-made models. Popular Chinese models exported to Europe include SAIC’s MG and Geely’s Volvo.
Shares of Chinese EV producers fell after the EU announcement. BYD shares, which were trading 4.5% higher before the news, closed down 2.8%, while Nio fell 1% and Xpeng dropped 2.5%.
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Jun Arima: Eco-fundamentalism as Grist for China’s Mill (pdf)
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Radio Free Asia: The number of Chinese automakers at the International Automobile Association Mobility Conference in Munich this week has spooked some European auto sector bosses. “It’s a Chinese takeover,” came the text from an alarmed senior executive, standing amid a vast array of gleaming Chinese vehicles at the show, reported sector analyst Michael Dunne on social media. “China invades Germany,” said another auto watcher. “China could be exporting 9 million cars a year by 2030,” Dunne, who heads an EV market consultancy, added.
