The European Commission is investigating whether the EU’s imported Chinese electric cars (EVs) benefit from illegal subsidies and whether this harms European manufacturers.
If both legs of inquiry are proved, the commission will establish “whether it is in the EU’s interest to remedy the effects of the unfair trade practices found by imposing anti-subsidy duties on imports of battery electric vehicles from China”.
The inquiry will delve into “BEV (battery electric vehicle) value chains in China” and is likely to draw evidence from many companies that manufacture and sell EVs and other cars, both in China and in the EU. From a strategic perspective, this backdrop means that the investigation, the way it will unfold for various companies, and the impact on their businesses will require careful consideration.
Given the potential market impacts, it is important to frontload thinking through the live issues now and, if necessary, seek professional counsel.
The investigation was launched by the commission itself, without a formal complaint from EU car manufacturers. Highlighting its significance, the investigation was announced by EC President Ursula von der Leyen in her State of the European Union speech in September.
The EC claims the inquiry was prompted by “sufficient evidence” that the “recent surge in low-priced and subsidised imports of electric vehicles from China into the EU” posed an economic threat to the EU’s electrical car industry.
The EC says the investigation will be finalised within 13 months.
Business Law Digest is compiled with the assistance of Baker McKenzie. Readers should not act on this information without seeking professional legal advice.