Inside the EU’s blockbuster Chinese EV probe: ‘the whole supply chain is subsidised’

Dozens of case handlers, 100-plus company visits, piecing together thousands of pages of evidence, tears new rift in an already fraught relationship

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Chinese carmaker SAIC-GM-Wuling has been hardest hit by the European Union sanctions on electric vehicles made in China. Photo: Xinhua

Published: 12:00pm, 13 Jun 2024Updated: 10:07am, 27 Sep 2024

It was just before lunchtime in Brussels, but the working day was creeping towards its end in Beijing, when phones pinged and screens flashed with the numbers that have threatened to upend China’s ties with Europe.

Car companies, lawyers, business groups and journalists all received the news at once. After seven months of speculation: 17.4 on BYD, 20 on Geely, 38.1 on SAIC and 21 on nearly all others - the tariff percentages the EU would slap on electric vehicle imports from China landed with a bang.

In the Belgian capital, officials set about briefing reporters on what had been uncovered in an investigation that saw dozens of case handlers spend 250 mission days on the ground in China, conducting 100-plus company visits, piecing together thousands of pages of evidence, which cumulatively tore a new rift in an already fraught relationship.

“The whole supply chain is subsidised,” said a senior official, who read through the charge sheet on a case that many predict could launch a trade war.

“This means that the Chinese government provides subsidies to all operators,” he continued. “Starting from the refining of lithium used in the batteries, to production of cells and batteries, to the production of BEVs [battery electric vehicles], and even transport of BEVs to EU markets.”

Chinese business representatives were shocked. After a quick scan of the numbers, an executive at one affected EV company vowed to start shipping hybrid cars to Europe instead, since they would not be subjected to such high duties.

“The EU has disregarded facts and WTO rules, ignored China’s repeated strong opposition, and ignored the appeals and dissuasions of many EU member governments and industries, and has acted unilaterally,” fumed a statement from China’s Ministry of Commerce, which landed minutes after the notification had been received.