Leading American electric automaker Tesla has reportedly obtained a a reprieve from the European Union’s electric vehicle probe against Chinese automakers, the South China Morning Post reported.
Notably, the initiative is part of the EU’s efforts to investigate the probable subsidy manipulation from Chinese-made EV models imported into Europe.
About the probe
The EU formally announced plans to launch a probe into Chinese-made electric vehicles in early October. It claims that these imports benefit from unjustly excessive state subsidies, enabling them to sell at extremely low prices.
Chinese automakers’ cheap offerings for European customers pose a threat to local brands and the entire local electric vehicle industry.
They continuously pressure European automakers, prompting them to cut prices to compete in the rapidly growing industry.
Tesla is undoubtedly an American brand, but it produces about 50% of its EVs in its Gigafactory in Shanghai. According to Fortune, it put Tesla at major risk of getting included in the EU’s investigations.
“Strictly speaking, it’s not limited only to Chinese brand electrical vehicles, it can be also other producers’ vehicles if they are receiving production-side subsidies.”
EU Executive VP Valdis Dombrovskis
Purpose
As mentioned, the EU aims to launch an investigation against Chinese electric automakers’ extremely lower prices than European brands’ models.
The EU intends to evaluate the potential unfair benefits and subsidies Chinese vehicle imports receive from European countries.
EU Executive VP Valdis Dombrovskis clarified that the local industry welcomes competition, but it demands fairness.
As part of the initiative, the EU is exploring the possibility of launching tariffs on electric vehicles and batteries from China.
Fortunately, the Musk-led company was excluded from the list of automakers the EU aims to investigate.
Involved Chinese automakers
According to the local publication, the EU targets BYD, SAIC Motor, and Geely for probable foul play in state subsidies.
Teslarati reported that the state subsidy investigation came after EU Chief Ursula von der Leyen raised the issue, saying that a “flood” of Chinese-made models was “distorting” the European electric vehicle industry.
If the EU comes up with sufficient evidence proving subsidy manipulation of Chinese automakers, other companies with Chinese factories, like Tesla, may get on the list of the EU’s probe.
EU’s decision to investigate a potential foul play of Chinese automakers in European state subsidies as it seeks to establish a level and fair competition in the region. It will also protect the European EV industry from the influx of cheap Chinese-made models that divert customers’ demand away from local brands.
