Von der Leyen reportedly did not discuss probe into Chinese EV prices with industry

European Commission President Ursula von der Leyen is facing criticism from the head of Germany’s automotive industry over an investigation into Chinese electric vehicle prices. The alleged lack of coordination with senior industry representatives could lead to damaging retaliatory measures from China. The news was reported by Euractiv.

Andreas Rade, managing director of the German Association of the Automotive Industry (VDA), recently said that the decision to launch an anti-subsidy investigation into Chinese electric vehicles had not been adequately discussed with a wider group of representatives from the most relevant sectors. Rade added that what we saw around six months ago was more of a solo effort by von der Leyen.

In her State of the Union address in September 2023, Ursula von der Leyen announced that the Commission planned to conduct an anti-subsidy investigation into Chinese manufacturers of electric vehicles (EVs), which could lead to new tariffs on Chinese EV imports. The main concern was the suspiciously low price of EVs, which results from generous state subsidies that artificially lower their prices.

Germany is not afraid of competition

Germany’s automotive industry, like its political leaders, has been sceptical of the investigation from the outset. They fear that China will respond with countermeasures that will hurt German exports more than the arrival of Chinese EVs on the European market.

“As far as I know, this procedure was not a joint project between Berlin and Paris, so to speak, but was initiated in the meantime by Brussels as part of the candidacy,” Rade said in the German parliament.

He added that, in his view, there had been no agreement on the approach at the European level among all industry representatives.

“Fair competition stimulates the economy,” German Chancellor Olaf Scholz said of the new competition from China at the IAA Mobility trade fair in Munich.

“In the 1980s, people said Japanese cars would overwhelm all the other markets. Twenty years later, it was cars made in Korea. Today, it is supposed to be Chinese electric cars,” Scholz added.

France welcomes the Commission’s moves

The French government, by contrast, supports a tougher stance towards Chinese competitors and has launched its own national electric vehicle support scheme, which includes sustainability criteria to exclude Chinese manufacturers.

Last week, the move was also backed by Chantal Kopf, a German MP and the Greens’ spokesperson in the German Bundestag.

“It is clear that the German automotive industry is, and should remain, an export industry. It is therefore understandable that there is great sensitivity about possible tensions in trade policy and retaliatory measures,” Kopf said.