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EU Says China EVs Funded by Subsidies, Plans Retroactive Tariffs

The European Commission said increasing imports from China risked injuring the region’s carmakers at a magnitude “that would be difficult to repair”

The BYD EV Dolphin Mini is displayed as the Chinese electric-vehicle producer announces the launch of the low-cost EV in Mexico City, Mexico
The BYD EV Dolphin Mini is displayed as the Chinese electric-vehicle producer announces the launch of the low-cost EV in Mexico City, Mexico. Photo: Reuters


The European Commission said this week it had sufficient evidence that Chinese electric vehicles were being funded by Beijing and mandated customs registration of all EVs being imported into the region starting Thursday.

The regulation suggests the bloc could impose retroactive tariffs on Chinese EVs starting today, if it later concludes they have been benefitting from an unfair advantage.

The EU is carrying out an anti-subsidy investigation into Chinese battery EVs to determine whether to impose tariffs to protect EU producers.


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The document, published on the Commission’s website on Tuesday, noted that average imports of electric vehicles into the region from China had jumped 11% in comparison to the investigation period of October 2022–September 2023.

Meanwhile, the increase was 14% year-on-year since the investigation was formally launched in October 2023, the Commission said.


Data on imports of Chinese electric vehicles to Europe
Data on imports of Chinese electric vehicles to Europe. Source: The European Commission


It added that carmakers in the EU would suffer in imports from China continued at these levels. That “would constitute injury which would be difficult to repair,” the document said.

It further noted that customs registration of incoming EVs was necessary for the Commission to prepare for “the potential retroactive imposition of measures” on Chinese carmakers.

The Commission’s probe is due to conclude by November, although it could impose provisional duties in July.


Subsidy ‘funded’ EVs

The China Chamber of Commerce to the EU said that it was disappointed by the move and that the surge of imports reflected increasing European demand for electric vehicles.

China has previously slammed the EU’s subsidy probe as “a naked protectionist act” and vowed to take “follow-up actions” based on the probe’s conclusion. It also said the probe lacked adequate evidence.



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In the document published on Tuesday, the Commission said Chinese EVs were being produced with “a financial contribution” from the Chinese government, regional governments and state-backed private bodies.

It said the nature of subsidies included “direct transfers of funds or liabilities”, “government revenue forgone or not collected”, and the “provision of goods or services for less than adequate remuneration.”

The subsidy probe comes at a time when Chinese EV-makers are quickly expanding across Europe. The European Commission said China’s share of EVs sold in Europe has risen to 8% and could reach 15% in 2025.

Last year, China overtook Japan as the world’s biggest auto exporter, owing largely to the success of local carmakers like BYD, Chery, SAIC and Geely.


  • Vishakha Saxena, with Reuters


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Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has worked as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a trader and investor, she is keenly interested in new economy, emerging markets and the intersections of finance and society. You can write to her at [email protected]


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