The European Union (EU) has issued warnings to three Chinese car manufacturers – SAIC, Geely, and BYD – indicating potential tariffs on their electric vehicle imports. According to Politico, the EU Commission sent letters to the manufacturers at the end of April, suggesting that extra tariffs could be introduced from the summer onwards.
The EU initiated an “anti-subsidy investigation” in October 2023, based on the assumption that Chinese electric vehicle importers benefit from excessive state subsidies, distorting competition in Europe. Politico reports that SAIC has been criticized for lack of cooperation, with the Commission stating, “Your client has almost systematically submitted requests for extensions of time, although it has not used this additional time to provide the information requested by the Commission.”
Regarding Geely, the EU Commission complained that none of the Geely Group’s financing companies responded to the Commission’s questionnaire. The Commission may resort to the concept of “facts available,” which could lead to higher tariffs on imported products.
EU Trade Commissioner Valdis Dombrovskis is quoted as saying that the investigation is “making progress” and could be finalized “before the summer break.” If tariffs are imposed, they will apply to all imports of electric vehicles from China, although the EU may vary the percentages for individual manufacturers.
The EU’s move has triggered a response from China, with a spokesperson for the Chinese Ministry of Commerce stating that the investigation lacks sufficient evidence and violates relevant WTO rules. The Chinese government considers the investigation to be protectionist and likely to disrupt global automotive industry and supply chains.
However, the EU insists that the investigation will be conducted in accordance with strict legal procedures in line with EU and WTO rules. Non-Chinese brands producing in China, such as Tesla, Renault, and BMW, will not be affected by the investigation.
