EV Investigation Irony: Europe’s Own Auto Manufacturers Utilize China’s Low Cost Manufacturing Base

The EU needs to realize that when it points one investigatory finger at Chinese EV subsidies, three more point back at it.

Among the ironies behind the EU launching an investigation into Chinese EV subsidies is the fact that Europe’s own automakers also take advantage of China’s low cost manufacturing base for vehicles.

Renault, for instance, markets its Dacia Spring as Europe’s most affordable EV, according to Bloomberg, yet the vehicle is manufactured in China’s Hubei province. It is priced at €20,800 ($22,300) in France, the report says. 

Meanwhile Chinese company BYD is pushing its most affordable vehicle in Europe at a price of €38,000. Bloomberg lists several other models that price cheaper in China than in Europe here. 

But that didn’t stop Commission President Ursula von der Leyen from saying earlier this week that: “Global markets are now flooded with cheaper Chinese electric cars, and their price is kept artificially low by huge state subsidies.”

She claimed: “This is distorting our market, and as we do not accept this distortion from the inside in our market, we do not accept this from the outside.”

But, as Bloomberg notes: “Models from Chinese-owned brands including MG, Polestar and Nio sell for much more in key European markets than back home.”

Recall earlier this week we wrote that the EU had launched an investigation into Chinese subsidies for electric vehicles. 

Speaking to parliament recently, von der Leyen said: “Their price is kept artificially low by huge state subsidies. This is distorting our market. And as we do not accept this distortion from the inside in our market, we do not accept this from the outside.”

China fired back in state mouthpiece The Global Times, which published a rebuttal late on Wednesday, claiming that the EU’s probe would likely “backfire” and that the EU’s economy would suffer as a result. 

The publication said that “…as the EU wields trade protectionist measures to suppress China’s EV industry, the European economy may suffer.”

The article claims that the EU isn’t bothered by the subsidies, but rather “the rapidly growing market influence of Chinese EV companies” and “the concern that homegrown European enterprises may be unable to compete.”

“Clearly, Europe is afraid,” The Global Times wrote. “They are afraid of competition from China, so they want to seek trade protectionism as a protective umbrella for European auto makers who are slowly transitioning toward electrification.”