China's EV probe a blatant act of protectionionism, say experts

China's EV probe a blatant act of protectionionism, say experts

The EU's move is viewed as a blatant act of protectionionism.

The European Union's decision to investigate China's electric vehicle imports will harm both sides, disrupting normal China-EU industrial and supply chain cooperation in the sector, said experts and industry insiders.

The investigation is groundless, uniform and unfair, and the EV industry - along with China's manufacturing sector in general - must prepare for a hard fight against more possible containment moves by Western countries in the near future, they said.

The country's competitive edge in the EV value chain, especially in batteries, will continue to propel the EV industry forward and boost its worldwide presence, they said.

They came after Ursula von der Leyen, the president of the European Commission, told EU lawmakers in Strasbourg, France, on Wednesday that the EU is launching an investigation into 'huge subsidies' that China allegedly provides to its electric vehicle makers.

s success has its roots in China's significant edge in the EV industrial chain, built up over the years under sufficient market competition, not because of the so-called'subsidies', said China Passenger Car Association Secretary-General Cui Dongshu.

EV industry instead of using unilateral economic and trade tools to obstruct the sector's development or increase operating costs for Chinese carmakers, Mr. Cui said.

The ministry of commerce said on Thursday that it was serious concerns and strong dissatisfaction with the EU's probe.

This is a blatant act of protectionism under the disguise of fair competition, which will disrupt and distort the global automotive industrial and supply chains, including that of the EU, the ministry said, adding that it will also have a negative impact on China-EU economic and trade relations.

China's competitiveness in EV brands is determined by their understanding of what buyers need and their ability to deliver such products or upgrades in a very short period of time, as well as competitive prices, which are backed by the complete, efficient and cost-effective Chinese auto supply chain, said Yang Jing, director of China Corporate Research at Fitch Ratings.

The Chinese Center for International Economic Exchanges chief researcher, Zhang Yansheng, pointed out that the EU has acted purely out of trade protectionism.

Underscoring that external pressures will only motivate China to forge a stronger domestic manufacturing industry, Zhang said that the investigation might be just the start of a series of containment moves by the EU and the United States to hinder the development of the Chinese EV industry.

Fitch Ratings analyst Yang Yang said that the dominance of Chinese companies across the worldwide EV value chain is set to be challenged by regulatory hurdles in the overseas market.

China's Association of Automobile Manufacturers has said Europe and Southeast Asia are two major export destinations for Chinese energy vehicle makers.

In the first eight months of the year, a total of 727,000 NEVs were shipped overseas from China, up 110 percent year-on-year. China EV exports onlyaccounted for 16 percent of those sold in Europe in 2022, according to the International Energy Agency.

China's most electric vehicles exporting to the EU last year were cars of American and European brands made in China, with Chinese brands accounting for 40 percent of exports.

The China Chamber of Commerce to the EU said on Wednesday that manufacturing each electric vehicle involves the collaboration of tens of thousands of suppliers from around the world.

The EU's commitment to market openness needs to be translated into tangible measures, guaranteeing a fair, impartial and nondiscriminatory business environment for foreign companies, the statement said. The EU's commitment to the World Trade Organization will run counter to efforts to restrict products solely based on their country of origin, the EU said in a statement.

Volkswagen, the largest carmaker in Europe, says strong competition gives consumers positive signals.

'T rest on what you have achieved,' said Oliver Blume, chairman of Volkswagen's board of management.