EV makers such as Tesla could fall under Europe’s subsidy probe into China, EU’s trade chief says

Non-Chinese brands of electric cars, such as Tesla and BMW, could be examined as part of an ongoing subsidy investigation on China that the European Union kicked off earlier this month.

“There’s a  lot of speculation, but at this stage the scope of this investigation is not decided yet. So we are doing the pre-initiation consultations with Chinese authorities and the scope is still to be determined, so what has been announced so far from the commission side is that, strictly speaking, it does not cover only Chinese brand electric vehicles,” Valdis Dombrovskis, executive vice president of the European Commission, told CNBC on Thursday.

The EU started a probe into subsidies that China has given to EV makers after gathering evidence of significant distortions in the European market, where vehicles produced in the bloc are facing cheaper steep competition from cheaper offerings of products made in China.

Authorities in Beijing have criticized what they describe as “protectionist” views from Brussels.

“Indeed [the probe] might cover also other electric vehicles, but exact scope, which producers are going to be covered by this, it is not decided at this stage,” Dombrovskis said on Thursday.

The EU investigation could stretch up to 13 months.

Dombrovskis traveled to China on Friday, where he held discussions with Chinese authorities in both Shanghai and Beijing. The EU investigation was brought up several times by Chinese officials during the four-day trip.

“This topic was extensively raised by the Chinese side during my visit, so I was reassuring Chinese authorities that this is a well-established process, [an] anti-subsidy investigation, and we are going to conduct it in strict compliance with applicable EU and WTO principles. It is [a] facts-based investigation, there will be ample opportunity to engage with Chinese authorities,” Dombrovskis said.

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