BRUSSELS, Belgium: This week, the European Commission launched an investigation into the influx of Chinese electric vehicles (EV) to protect European Union (EU) producers.
In the investigation, the commission will decide whether to impose punitive tariffs against cheaper Chinese EV imports, which it claims benefit from state subsidies.
In her annual address to the European parliament, Ursula von der Leyen, President of the European Commission, said, "Global markets are now flooded with cheaper electric cars. And their price is kept artificially low by huge state subsidies."
In its highest-profile case against China since an EU probe into Chinese solar panels a decade ago, the commission will assess whether to impose car tariffs above the standard 10 percent EU rate.
The 13-month anti-subsidy investigation will cover battery-powered cars from Chinese manufacturers and non-Chinese brands that produce EVs there, such as Tesla, Renault, and BMW.
In response to the EU, the Chinese Chamber of Commerce said it opposed the investigation, stressing that the sector's competitive advantage was not due to subsidies. It also urged the EU to assess Chinese EVs objectively.
Partly due to Beijing's close relations with Moscow amid Russia's invasion of Ukraine, tensions between China and the EU have been rising, with the bloc aiming to reduce its reliance on the world's second-largest economy.
The influx of cheaper Chinese EVs has already forced some European carmakers to take action. In July, Renault announced it would cut EV production costs by 40 percent.
Von der Leyen stressed the importance of EVs to the EU's ambitious environmental objectives.
"Europe is open to competition. Not for a race to the bottom," she said.