China Rebukes EU After Formal Launch of EV Subsidy Probe

ELECTRIC VEHICLE - SINGAPORE/BRUSSELS, China complained on Wednesday about the "very short" time provided by the European Union to engage in consultations for the bloc's inquiry into subsidies for electric vehicles.

The remarks came as the European Commission formally launched the investigation into whether to set tariffs to shield EU producers from a "flood" of imports of cheaper Chinese electric vehicles (EV) it says benefit from state subsidies.

China is "very much dissatisfied" with the anti-subsidy investigation as it lacks adequate evidence and does not conform to World Trade Organization rules, the country's commerce ministry said in a statement.

The Chinese side has not been given adequate consultation materials, it said and would pay close attention to the Commission's investigative procedures so as to safeguard the rights and interests of its firms.

Read Also: ECB Raises Rate to Record High and Signals End of Hikes

China also urged the EU to safeguard the stability of the global supply chain and a strategic partnership between the two, while "prudently" applying trade remedies.

In a statement posted on its official WeChat account late on Wednesday, the China Association of Automobile Manufacturers (CAAM) called the probe an "obvious act of protectionism" that would hinder the growth of the global EV industry.

The formal launch of the EU investigation came with an announcement in the bloc's official journal, which said China had been invited for consultations, although it did not give a timeframe for those talks.

Information gathered by the Commission tends to show that producers in China benefit from subsidies to the detriment of EU industry, it added.

Read Also: Indonesia Asks China's Geely to Help Build Homegrown EV by 2026

It said these were in the form of grants, loans from state-owned banks on preferential terms, tax cuts, rebates, and exemptions, and state provision of goods or services, such as raw materials and components, at less than adequate prices.

It said subsidies had allowed a rapid rise of cheap imports into the EU, with expected overcapacity in China likely to lead to further increases in the near future.

The Commission has said China's share of EVs sold in Europe has risen to 8% and could reach 15% in 2025.

The journal advised parties wanting a hearing to request one within 15 days and set a deadline of 37 days to receive comments.