EU Launches China EV Subsidy Probe

Photo: Wikimedia Commons

The Facts

  • On Wednesday, the EU announced an investigation into Chinese subsidies for electric vehicles (EV) sold in Europe, alleging that "global markets are now flooded with cheaper electric cars and their prices [are] kept artificially low by huge state subsidies."

  • According to the China Passenger Car Association, around 350K Chinese EVs were exported to nine European nations in the first six months of 2023, with this number having quadrupled in the last five years.

The Spin

Anti-China narrative

The EU cannot stand by while China floods global markets with artificially cheap electric vehicles. Chinese EV manufacturers undercut European companies not because they're better at it, but because their government overflows the market with cash. Furthermore, this is only an investigation, so China should save its complaints until a report is issued.

Pro-China narrative

If the EU were to examine the development of China's electric vehicle industry objectively, it would find that Chinese EVs generally retail for nearly twice as much in Europe as they do in China, not because of state subsidies but because of the highly competitive industrial supply chain resulting from strong market competition. The EU's accusations have nothing to do with reality — they're only about protectionism.

Nerd narrative

There's a 50% chance that at least 88.42% of new car sales in China will be electric by 2035, according to the Metaculus prediction community.

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