The European Commission and China's commerce ministry are at loggerhead over the evidence and timetable for an EU investigation into Chinese subsidies to battery-powered electric car makers.
In a formal notice of investigation published on Wednesday, the commission said it had ample evidence that lower-priced imported electric vehicles, subsidized by China, were increasing rapidly in Europe and driving prices down, putting pressure on local industry's market share and profits.
"In the EU, a fast-growing market that requires substantial and sustained investment as the transition to full electrification takes place, this surge in low-priced imported vehicles and significant market share capture would lead to serious losses for the EU automotive industry that would soon prove unsustainable," the commission said.
The Commission said it had evidence of grants, loans, credit lines and bonds being offered on favourable terms by state-owned and state-backed institutions. The Commission also cited preferential export insurance rates and various tax breaks, exemptions and rebates as evidence, and alleged that the Chinese government provided raw materials, components and services in exchange for what it described as inadequate compensation.
A spokesman for China's commerce ministry said on Wednesday that the investigation "lacks sufficient evidence to support it and does not comply with relevant WTO rules".
The spokesman also disputed the time frame for the investigation.
'China expresses strong dissatisfaction with this,' the spokesman said. The European side asked China to hold consultations in a very short period of time and failed to provide effective consultation materials, which seriously damaged China's rights.
According to the notice, the European Commission has given companies seven days from Wednesday to respond to the investigation by providing preliminary information. The investigation is expected to last a year.