Has Europe just unearthed the hatchet against the Chinese electric car industry? The announcement of the investigation opened by the European Union provoked in any case an immediate reaction from Beijing, which threatens retaliation for what it describes as protectionism.
• What is the origin of this conflict?
At the beginning of the year, the European Union confirmed the goal of selling zero-emission cars from 2035. Specifically, the new car market must offer 100% electric models (with battery, the most advanced technology available). or through a hydrogen fuel cell) and no longer any thermal model, gasoline, diesel, hybrids included.
A transformation of the European market that has been underway for some time and that logically attracts Chinese manufacturers ahead of the electric car. An ambition that is reflected in the figures: in 2021, Chinese electric vehicles had a market share of 4% in Europe, while it is currently 8%. And that would be just the beginning.
A group like BYD, a leader in China, shows important ambitions in Europe, as does the MG brand (Chinese SAIC group), in particular by offering vehicles at lower prices than traditional brands. Well-established brands in Europe, such as Stellantis (Peugeot, Fiat, Opel, Citroën, DS…), Renault (with Alpine and Dacia) and Volkswagen (with Skoda, Seat, Cupra, Audi, Porsche…) and that have also committed their Transformation high speed.
“Competition from Chinese electric vehicles could cost the European automotive sector 24 billion euros per year until 2030,” estimated a study by Allianz Trade last May.
• What are these “Chinese subsidies” for electric cars?
This is what the European investigation will try to determine. A very long investigation, which should last 13 months in total and would begin next October.
13 months during which an army of European Commission experts, analysts, economists and lawyers will search for evidence that the Chinese state subsidizes its electric vehicle manufacturers, for example by making them pay less for electricity, lowering raw material prices materials or granting loans at extremely favorable rates.
Dumping practices or distortions of competition that cause “artificially low prices” and that, if discovered, could trigger a series of measures in Europe to remedy them.
• What measures can Europe take?
An important point: we will not necessarily have to wait for the end of the investigation to take provisional measures against Chinese manufacturers. Decisions could be announced between 2 and 9 months after the opening of the investigation, if the danger is considered real for the European economy, to such an extent that we could not risk waiting, we indicated in Brussels.
In Ursula von der Leyen’s entourage we are assured that the EU is not going head to head in this confrontation, that a certain amount of elements and evidence have already been collected.
The main and most likely retaliatory measure would be to impose additional customs duties on Chinese electric cars: they are currently 10% and could increase to 20% or even 30% to restore a fair balance.
Another possible measure: the European Commission could set a minimum price. This would consist, for example, of prohibiting Chinese manufacturers from selling their cars in Europe for less than 20,000 euros or 30,000 euros, for example.
Two examples of Chinese brand vehicles currently offered in France: an MG4 starting at 29,990 euros without bonuses and a BYD Dolphin at 33,990 euros (but a basic version was planned at 28,990 euros). They are often compared to a model made in France such as the Renault Mégane E-Tech, whose prices currently start at 38,000 euros.
But the cheapest “made in China” model on the market is currently still the Spring from Dacia (Renault group), whose starting price is 20,800 euros (even without including bonuses).
• What possible retaliation from China?
The investigation announced this Wednesday by the president of the European Commission, Ursula Von der Leyen, is “openly protectionist” and “will have a negative impact on economic and trade relations between China and the European Union,” the Ministry of Foreign Affairs criticized in a statement. Chinese Foreign Affairs. Trade.
Various measures could be taken, both with regard to Chinese imports and exports and beyond the automotive sector. Sanctions that would have a particularly negative impact on countries that depend on China for their trade, such as Germany, which is already in poor condition.
In a context of technological rivalry with the United States, China, for example, recently restricted exports of gallium and germanium, two rare metals whose The Asian giant is the main producer and essential for the production of semiconductors.
Source: BFM TV
