European Union: European Commission Targets China's Electric Vehicle Sector 

The European Commission has provisionally concluded that the battery electric vehicle (BEV) value chain in China benefits from unfair subsidies, posing a threat of economic injury to BEV producers in the European Union. This conclusion is part of the Commission's ongoing investigation, which also examined the potential consequences and impact of measures on BEV importers, users, and consumers within the EU.

In light of these findings, the Commission has engaged with Chinese authorities to discuss the matter and explore solutions that comply with World Trade Organization (WTO) regulations. As a preliminary measure, the Commission has disclosed the levels of provisional countervailing duties it intends to impose on BEV imports from China. These duties are set to be introduced on July 4, contingent upon the failure of discussions with Chinese authorities to yield an effective resolution. The duties will be guaranteed by customs in each EU Member State and will only be collected if and when definitive duties are imposed.

The provisional countervailing duties for the three sampled Chinese BEV producers are as follows:

• BYD: 17.4%
• Geely: 20%
• SAIC: 38.1%

Other cooperating Chinese BEV producers, not individually sampled, will face a weighted average duty of 21%. Non-cooperating Chinese BEV producers will be subject to a residual duty of 38.1%.

Procedure and Next Steps

The investigation, initiated by the Commission on October 4, 2023, is an ex-officio anti-subsidy investigation targeting imports of passenger BEVs originating in China. The investigation is expected to conclude within a maximum of 13 months from initiation. Provisional countervailing duties may be published by July 4 at the latest, with definitive measures to be imposed within four months of the provisional duties' implementation.

Tesla, a BEV producer in China, has requested an individually calculated duty rate, which may be granted at the definitive stage. Other non-sampled companies wishing to have their situations assessed can request an accelerated review after the imposition of definitive measures. Such reviews must be concluded within nine months.

Information regarding the provisional duty levels has been shared with all interested parties, including EU producers, importers, exporters, and their representative associations, as well as the Chinese government. Sampled companies have received individual calculations and have the opportunity to comment on their accuracy. The Commission can revise its calculations based on sufficient counter-balancing evidence, in accordance with EU law.

The outcome of this investigation will significantly impact the BEV market in the EU, determining the future dynamics between EU and Chinese BEV producers.

Source/ recommended read:

• Electric vehicle value chains in China (europa.eu)