The investigation will be concluded within 13 months, and any provisional anti-subsidy duties can be levied within nine months after initiation if legally warranted.

(Image credit: CnEVPost)

The European Union formally opened an anti-subsidy investigation into electric vehicles (EVs) from China, after unveiling the plan last month. China promptly voiced its opposition to the move.

"The European Commission has formally launched today an anti-subsidy investigation into the imports of battery electric vehicles (BEV) from China," reads an announcement issued by the commission today.

The investigation will first determine whether China's EV value chain has benefited from "illegal subsidization" and whether such subsidies have caused or threatens to cause economic injury to EU EV producers, according to the announcement.

Based on the results of the investigation, the European Commission will determine whether it is in the EU's interest to remedy the effects of "unfair trade practices" by imposing countervailing duties on imports of EVs from China, the announcement said.

The European Commission launched the investigation on its own initiative, having gathered sufficient evidence that the recent surge in imports of low-priced subsidized EVs from China poses an economic threat to the EU's EV industry, according to the announcement.

Although no formal complaint has been received from EU industry to initiate proceedings, EU anti-subsidy rules require EU industry to cooperate with ex officio investigations, the commission said.

Pre-initiation consultations were held with the Chinese government prior to the issuance of the initiation notice, as legally required under EU and WTO rules, it said.

"The investigation will be concluded within maximum 13 months of initiation. If legally warranted, any provisional anti-subsidy duties may be imposed by 9 months after initiation, with any definitive measures to be imposed up to 4 months later or within 13 months of the initiation of the investigation," the notice read.

The European Commission unveiled the plan to launch the investigation last month, with European Commission President Ursula von der Leyen saying at the time that the global market is now flooded with cheap EVs from China.

Chinese EV prices are kept artificially low by huge state subsidies, which are distorting the EU market, she said.

China's Ministry of Commerce (MOC) and the China Chamber of Commerce to the EU (CCCEU) both voiced their opposition to the plan at the time. After the European Commission announced today that it formally launched the investigation, the Chinese authorities reiterated their position.

The European side launched this anti-subsidy investigation based only on subjective assumptions about the so-called subsidy program and the threat of damage, without sufficient evidence, the MOC said in a statement, adding that this is not in line with the relevant WTO rules, and that China expresses its strong dissatisfaction with this.

The European side's demand that the Chinese side conduct consultations within a very short period of time and its failure to provide effective consultation materials have seriously undermined the rights of China, the statement said.

China had made it clear that the EU's move was to protect its own industry under the guise of fair trade and was a blatant act of protectionism, which would seriously disrupt and distort the global automotive industry chain and supply chain, including the EU, and negatively affect China-EU economic and trade relations, according to the statement.

China urged the EU to use trade remedy measures prudently from the perspective of maintaining the stability of the global industrial chain supply chain as well as the overall situation of the China-EU comprehensive strategic partnership.

China also urged the EU to encourage deeper cooperation in the new energy industry represented by EVs, and to create a fair, non-discriminatory and predictable market environment for the joint development of the EV industry in China and Europe.

China will pay close attention to the European side's follow-up investigation procedures and firmly safeguard the legitimate rights and interests of Chinese enterprises, the statement said.

Separately, the China Association of Automobile Manufacturers (CAAM) also said in a statement today that the European side's move would seriously disrupt the global automotive industry chain and supply chain, which it regretted and firmly opposed.

"It is a very clear fact that China's EV market is a very competitive market and is by no means protected by subsidies," the CAAM said.

The EU's disregard for this fact and insistence on launching an anti-subsidy investigation is a clear act of protectionism that will surely cast a shadow over the global development of EVs, the CAAM's statement said.

The EU's move will slow down the development process of the global EV industry, including the EU, and adversely affect the global carbon neutral process, the statement said.

The Chinese and European automotive industries are partners, not rivals, and the development of the automotive industry depends on fair competition, not protectionism, the CAAM said.

"China's auto industry is willing to actively engage in dialogue and communication with the EU industry to address mutual concerns and achieve common development through cooperation," the statement read.

EU announces anti-subsidy probe into EVs from China