Jakarta, CNBC Indonesia – The European Commission, the executive body of the European Union (EU), launched an investigation into electric vehicles in China on Wednesday (13/9/2023). This is related to the subsidies given to the manufacturer.
President Ursula von der Leyen confirmed the investigation in her annual state of the nation address to the European Parliament in Strasbourg. “Europe is open to competition but not to a race to the bottom,” he was quoted as saying CNBC International.
In front of all members of parliament, von der Leyen said all parties must think clearly about the risks faced in this regard. He said the anti-subsidy probe should implement any action within 13 months of its start.
He also said that temporary measures must be implemented no later than nine months. This will then be followed by four months to implement definitive measures if legally justified.
“For example, the electric vehicle sector, this is an important industry for an environmentally friendly economy with great potential in Europe, but the global market is now flooded with cheaper Chinese electric cars and their prices are kept low due to huge state subsidies,” he explained.
“This distorts our market and because we do not accept this distortion from within our market, we also do not accept this distortion from outside,” he added.
On the other hand, von der Leyen also said that the bloc must defend itself against unfair practices. But he stressed the importance of keeping open lines of communication with Beijing.
“Reducing risks, not decoupling. This will be my approach to the EU-China summit later this year,” he added.
Von der Leyen compared the impact on the solar industry in Europe and what might happen to the automotive industry in the region. Previously both faced stiff competition from Chinese companies.
Europe’s biggest carmakers said earlier this month that they were concerned about the competitive threat posed by new Chinese companies as the auto industry moves towards electrification. The unexpected announcement marks another challenge in EU-China relations and comes after the United States (US) and Europe agreed to reduce their dependence on Beijing, rather than cutting ties completely, at the end of May.
[Gambas:Video CNBC]
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