BRUSSELS, Sept 13 (Reuters) - The European Commission launched an investigation on Wednesday into whether to impose punitive tariffs to protect European Union producers against cheaper Chinese electric vehicle (EV) imports it says are benefiting from state subsidies.
"Global markets are now flooded with cheaper electric cars. And their price is kept artificially low by huge state subsidies," European Commission President Ursula von der Leyen said in her annual address to the bloc's parliament, seen by many in Brussels as a pitch for her re-appointment for a second term.
The Commission will have up to 13 months to assess whether to impose tariffs above the standard 10% EU rate for cars in its highest profile case against China since an EU probe into Chinese solar panels narrowly avoided a trade war a decade ago.
The anti-subsidy investigation covers battery-powered cars from China, so also includes non-Chinese brands made there, such as Tesla
(TSLA.O), Renault
(RENA.PA) and BMW
(BMWG.DE). It is also unusual in that it is brought by the European Commission itself, rather than in response to an industry complaint.
...
"This is the start of a long journey," said analyst Simone Tagliapietra of think tank Bruegel. "It could ultimately work, but this must go in parallel with an active industrial policy to make sure EU industry quickly develops its competitiveness."
Chinese state subsidies for electric and hybrid vehicles were $57 billion from 2016-2022, according to consulting firm AlixPartners, helping China become the world's biggest EV producer and to pass Japan as the largest auto exporter in the first quarter of this year.