“Flooded with cheaper Chinese electric cars:” EU fights back to protect car makers

In a display of unity amid mounting challenges to Europe’s role in the global economy, ministers from France and Germany have backed efforts by the European Union to investigate unfair competition allegations against China for electric vehicle production.

“Europe has to make sure its interests are being safeguarded,” German economy minister Robert Habeck said at a press conference in Berlin together with his French counterpart, Bruno Le Maire.

The joint declaration followed an announcement from the EU Commission president Ursula von der Leyen to start a probe into possible distortion of competition by the Chinese government through illicit subsidies for its booming electric vehicle industry.

“Global markets are now flooded with cheaper Chinese electric cars,” von der Leyen said in a speech this week. “And their price is kept artificially low by huge state subsidies.

“This is distorting our market. So I can announce today that the Commission is launching an anti-subsidy investigation into electric vehicles coming from China. Europe is open for competition. Not for a race to the bottom.”

France and Germany ae among the greatest advocates for a push to low carbon economy, and both countries are hoping to reinvigorate national industries in the process, including the car industry.

They have sought close cooperation to streamline efforts to obtain access to relevant EU support programmes, despite differences over key aspects of the energy transition, particularly regarding nuclear power.

Habeck said the “many subsidies” available in the EU should be better focused on supporting industrial transformation. Reducing regulation and speeding up procedures and licensing are among the steps both ministers said their countries will better coordinate in the future and integrate into wider EU efforts of the Net Zero Industry Act.

“It’s not only about expanding renewables faster, but also expanding those industries that make those renewables faster,” Habeck said.

Le Maire said that, faced with competition from China and a fast-recovering US economy, Europe must close its ranks to defend its position on global markets.

“We cannot be satisfied with investments in innovation that are inferior to those in China or the US,” he added. Ensuring access to low-carbon energy “at attractive prices” for all member states is a topic that will preoccupy the EU for some time, the French minister said.

“Europe must defend its economic and industrial interests” and “think big” about joint projects to translate its ambitions into action, such as the battery production initiative France and Germany launched together in the past, LeMaire said.

“We are in the process of building up a battery production line that is just as competitive and innovative as that of China.” Paris and Berlin could mirror these successes in other areas too, including artificial intelligence, solar panel production, space exploration, raw materials or hydrogen.

Clean Energy Wire.