EU trade chief says the outcome of China EV probe cannot be prejudged

cnbc.com:

BEIJING — Europe has launched an investigation into Chinese electric vehicle subsidies, but no assumptions should be made about the probe's outcome, the head of trade for the European bloc's executive branch said Tuesday.

About two weeks ago, the European Commission announced an investigation into government subsidies for EV makers in China.

The probe focuses on subsidies for electric vehicle production, and will be «fact-based,» Valdis Dombrovskis, executive vice president and trade commissioner of the European Commission, told reporters Tuesday. He was speaking in Beijing after a four-day trip in China.

The investigation will be in line with EU and World Trade Organization rules, and involve engagement with Chinese authorities and businesses, he added.

«The outcome of investigation is going to be determined by those… [I] cannot prejudge the outcome of the investigation,» Dombrovskis said.

China's electric car exports have surged in recent months. When considering exports of all types of cars, China's have already surpassed Germany's, and are on track to surpass Japan's this year as the largest car exporter globally, according to Moody's.

Homegrown Chinese electric car companies Nio, Xpeng and BYD are among those that have started to expand to Europe, but in relatively small numbers so far. More than two-thirds of China's electric car exports to Europe were from Tesla and other international brands manufacturing in China, according to HSBC.

However, the future consequences for business are great.

Dombrovskis noted the EU plans to phase out sales of internal combustion engine cars by 2035. He also said the share of Chinese EV brands in the EU market has gone from less than 1% to 8% in the last two or three years.

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