![]() "It could ultimately work, but this must go in parallel with an active industrial policy to make sure EU industry quickly develops its competitiveness."Ĭhinese 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.Ĭhina terminated a generous 11-year subsidy scheme for EV purchases in 2022 but some local authorities have continued to offer aid or tax rebates to attract investments, as well as subsidies for consumers. "This is the start of a long journey," said analyst Simone Tagliapietra of think tank Bruegel. Not for a race to the bottom," she said, noting the EU did not want to repeat the experience of its solar panel industry, which was decimated by cheaper Chinese imports. Von der Leyen stressed the importance of electric vehicles to the EU's ambitious environmental objectives. Germany's car industry relies on China for a large proportion of its sales revenue and has long advocated keeping trade doors open. ![]() rival Tesla, which has cut prices several times this year even as that has eaten into its margins.īut Germany's VDA auto association said the EU must take into account a possible backlash from China and focus on creating the conditions for European players to succeed - from lowering electricity prices to reducing bureaucratic hurdles. Like other EV makers, it also faces increased pressure from U.S. Renault announced in July that it aimed to slash production costs for its electric models by 40%. ![]() The influx of cheaper Chinese electric vehicles has already prompted some European carmakers to take action.
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