EU Commission Found Unfair Subsidies in China’s Electric Vehicle Industry

Simona Mazzeo

Brussels (Brussels Morning) – The European Commission’s investigation found Chinese BEV producers benefit from unfair subsidies, threatening EU producers. Provisional countervailing duties up to 38.1% are planned, pending talks with China.

As part of its continued investigation, the European Commission has provisionally figured that the battery electric vehicles (BEV) value chain in China profits from unfair subsidisation, which is generating a threat of economic injury to EU BEV producers. The investigation also concerned the likely consequences and effects of measures on importers, users and consumers of BEVs in the EU.

How is the EU Addressing Subsidized Chinese BEV Imports?

Consequently, the European Commission has reached out to Chinese management to discuss these findings and investigate possible ways to resolve the problems identified in a WTO-compatible manner.

In this context, the EU Commission has pre-disclosed the status of provisional countervailing duties it would charge on imports of battery electric vehicles (‘BEVs’) from China. Should talks with Chinese authorities not lead to an adequate solution, these provisional countervailing duties would be presented from 4 July by a guarantee (in the form to be determined by customs in each Member State). They would be managed only if and when definitive duties are imposed.  

How Will the EU’s Countervailing Duties Affect BEV Imports?

The individual duties the EU Commission would apply to the three sampled Chinese producers would be BYD: 17,4%; Geely: 20%; and SAIC: 38,1%. Other BEV manufacturers in China, which cooperated in the examination but have not been sampled, would be subject to the subsequent weighted average duty: 21%. All other BEV producers in China which did not collaborate in the investigation would be subject to the following residual duty: 38,1%. 

What Findings Led to the EU’s Anti-Subsidy Investigation on Chinese BEVs?

On 4 October 2023, the EU Commission formally began an ex-officio anti-subsidy investigation on imports of battery electric vehicles for passengers developing in China. Any investigation shall be completed within a maximum of 13 months of initiation. Provisional countervailing duties may be issued by the Commission within 9 months after initiation (i.e. by 4 July at the latest). Definitive standards are to be imposed within 4 months after the imposition of the acting duties.

What Are the Next Steps in the EU BEV Investigation?

Following a substantiated proposal, one BEV producer in China – Tesla – may obtain an individually estimated duty rate at the definitive stage. Any other firm producing in China not selected in the final sample that desires to have its particular situation analysed can ask for an accelerated examination, in line with the basic anti-subsidy Regulation, just after the imposition of standard measures (i.e. 13 months after initiation). The deadline for completing such a review is 9 months.  

Information about the planned levels of provisional duties is delivered to all interested parties (including Union producers, importers and exporters and their representative associations, Chinese exporting producers and their figurative associations, and the country of source and/or export, i.e. China), and the EU Member States before any such actions are imposed, in line with the procedures formed by the EU basic anti-subsidy Regulation. 

Sampled groups have individually received information about their own estimations and have the possibility to remark on the accuracy thereof. Should these eventual comments feed sufficient counter-balancing proof, the Commission can change its calculation in accordance with EU law.   

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Simona Mazzeo is a journalist at Brussels Morning News. She is covering European Parliament, European Council, European Commission & Italy News. She is a law graduate and lawyer residing in Agropoli, has carved out a multifaceted career dedicated to justice and social advocacy. She actively serves as a delegated councilor for the Equal Opportunities Committee of the Bar Association of Vallo della Lucania, championing fair and equal representation within the legal system. Recognized for her expertise and empathy, Simona is qualified for registration in the list of Special Curators of minors in civil and criminal matters at the Court of Vallo della Lucania, ensuring the rights and interests of vulnerable children are protected throughout legal proceedings. Beyond her legal practice, Simona demonstrates a strong commitment to social causes. She is a founding member of the Free Lawyer Movement, a non-profit organization dedicated to providing legal assistance to those who cannot afford it. Additionally, she leverages her knowledge and passion for social justice as a non-professional journalist, contributing insightful and informative pieces on relevant legal and societal issues. Through her diverse endeavors, Simona Mazzeo exemplifies dedication to legal excellence, social responsibility, and a fervent belief in equal access to justice for all.