European Commission President Ursula von der Leyen said in her annual State of the European Union speech on Wednesday, "Global markets are now flooded with cheaper Chinese electric vehicles. And their prices are kept artificially low by massive state subsidies. This is distorting our market. We don't accept this internally, we don't accept it externally either."
The investigation aims to defend the EU against unfair practices. However, von der Leyen says it is important to maintain an open dialogue with China because cooperation is also needed on other issues. She claims that the plan is not to leave China, but to reduce the risk.
According to ACEA, the announcement is seen as a "positive signal" that the European Commission recognises the increasingly asymmetric situation facing the European car industry.
Last month, ACEA's director general Sigrid de Vries warned that Chinese brands and Chinese-made vehicles were making a rapid entry into the European electric vehicle market, fuelled by public money and government intent. "China's comparative advantage and cost-competitive imports could reduce the domestic market share of European carmakers and ultimately affect local activities," she said.
German carmakers Volkswagen and BMW Group, which depend on Chinese production and exports, have not yet commented on the issue. The same applies to the European-based, Chinese-owned brands Volvo Cars, Polestar and Lotus, among others.