China commerce minister to advocate for EVs in Europe

PARIS/SHANGHAI (Reuters) – China’s commerce minister will travel to Europe in April for discussions about the European Commission’s investigation into whether China’s electric vehicle industry has benefited from unfair subsidies, four people briefed on the plan told Reuters.

Wang Wentao will visit France, a French government source and two other people with knowledge of the trip told Reuters. France’s trade ministry and European Commission did not immediately respond to requests for comment.

The Commission has begun an investigation to determine whether to impose tariffs on exports to protect European car makers. It is due to conclude by November, although the EU executive could impose provisional duties earlier.

China’s Ministry of Commerce did not immediately respond to a request for comment from Reuters.

A spokesperson for the Commission said it did not comment on bilateral engagements between EU Member States and third countries.

The Commission has said China’s share of EVs sold in Europe could reach 15% of the market in 2025, based on their price discount compared with battery-powered cars made in Europe.

China has contested the claim that its EV industry has boomed because of subsidies and called the EU inquiry “protectionist.” Analysts say factors, including China’s dominance of the battery supply chain, innovation and cut-throat competition in a crowded domestic market have also reduced prices.

European Commission investigators inspected Chinese automakers earlier this year as part of their inquiries, Reuters has reported.

Those inspections targeted market-leader BYD, Geely and SAIC people involved in the process said in January.

Wang will visit France starting April 7 and will be accompanied on the trip by representatives of BYD, SAIC and Geely, the companies that have already hosted Commission investigators, one of the people with knowledge of the trip said.

Chinese President Xi Jinping is scheduled to visit his French counterpart in May during a trip that is expected to focus in part on mounting EU-China trade tensions.

France has backed the Commission

investigation, part of a years-long campaign by President Emmanuel Macron for the EU to get tougher on trade and insist on a level playing field.

China became the largest exporter of cars last year, surpassing Japan, a trend analysts have said reflects the massive overcapacity of production within China given the size of its domestic market.

Including gasoline-powered cars, China had the capacity to produce 43 million vehicles annually as of end 2022, but its plant utilization rate – a measure that correlates to profitability – was just under 55%, data from the China Passenger Car Association shows.

Chinese EVs already face a standard tariff of 10% in the European Union.

In the United States, Chinese-made EVs have been kept out by tariffs of 27.5% and a package of federal consumer incentives under the Biden Administration that they do not qualify for as imports. Some US lawmakers have pushed for higher tariffs.

Chinese automakers have been rolling out plans for more production in overseas markets, in part in response to the backlash over exports.