Brussels (AP) - The European Union has announced its plan to launch an investigation into the subsidies provided by China to electric vehicle (EV) makers. Concerns have been raised that these subsidies are negatively impacting European companies as global markets become flooded with cheaper Chinese electric cars.
European Commission President Ursula von der Leyen addressed EU lawmakers in Strasbourg, France, stating, "This distortion in our market caused by the artificially low prices of Chinese EVs, which are maintained by substantial state subsidies, is unacceptable. We cannot tolerate this situation."
Von der Leyen continued, "Just as we reject internal market distortions, we must also reject these practices from outside our borders. Therefore, I am pleased to announce that the commission will initiate an anti-subsidy investigation into electric vehicles originating from China."
China has become the largest market for electric vehicles, thanks in part to massive subsidies provided by the country's leaders. This investment has allowed Chinese brands to gain market share, posing a significant challenge to global automakers in their home regions.
Notably, brands such as BYD Auto and Geely Group's Zeekr unit have recently entered the Japanese and European markets. Geely, which owns Volvo Cars and its all-electric luxury brand, Polestar, is among those expanding their presence in these regions.
While Europe embraces healthy competition, President von der Leyen stated firmly that they will not engage in a race to the bottom. "We must protect ourselves against unfair practices," she emphasized. However, specific details about the investigation have not yet been disclosed.
Following the announcement, BYD shares fell by 3% in Hong Kong, while Geely shares experienced a 1% decline. Chinese EV makers Nio and Li Auto are listed in New York.
Contributed to this report.
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