On October 4, the European Commission issued a notice announcing the launch of an anti-subsidy investigation into Chinese electric vehicles. Subsequently, the Ministry of Commerce and the China Automobile Association publicly voiced their strong dissatisfaction and firm opposition to this act.
In the face of the EU's stubbornness, domestic new energy vehicle companies are still silent. However, in the view of many institutions, car electrification should be a long-term trend, China's electric vehicles have obvious advantages, and the continuation of automobile exports should be the benchmark judgment, and the industry will eventually move toward product competition.
However, in the view of the industry, this move may have a limited impact on domestic electric vehicle exports in the short term, because domestic car companies are generally low in the European market share. Tesla, which contributes the main production capacity of the Shanghai Gigafactory, has nearly 20% of the market share in the European electric vehicle market, which may be affected in the short term.
Ministry of Commerce, China Automobile Association voice
The European Commission announced on October 4 that it decided to launch an anti-subsidy investigation into pure electric passenger vehicles imported from China. Later, the Ministry of Commerce first responded, saying that the EU launched the anti-subsidy investigation only based on subjective assumptions about the so-called subsidy projects and the threat of damage, lack of sufficient evidence to support, and do not comply with relevant WTO rules. China is strongly dissatisfied with this.
At the same time, the Ministry of Commerce believes that the European side has asked China to conduct consultations in a very short period of time and has not provided effective consultation materials, which has seriously damaged China's rights.
At the 10th China-Eu High-level Economic and Trade Dialogue held not long ago, the Chinese side made it clear that the investigation measures to be taken by the EU are in fact to protect its own industry in the name of "fair trade", which is a naked protectionist act that will seriously disrupt and distort the global automotive industry chain and supply chain, including that of the EU, and have a negative impact on China-Eu economic and trade relations.
Since then, the China Association of Automobile Manufacturers (hereinafter referred to as "CAAM") also publicly said: "The European side's move will seriously disrupt the global auto industry chain and supply chain, which we express regret and firmly oppose."
Caam said that China's auto industry adheres to the path of green, low-carbon and sustainable development, which is completely consistent with the development direction of the European Union. The Chinese market is the largest overseas market for many EU car companies, and EU car companies have witnessed the growth of China's electric vehicle industry. China's electric vehicle market is a very competitive market, by no means rely on subsidies to support protection, this is a very clear fact.
The CAAM publicly stated that the Chinese and European auto industries are partners rather than rivals, and the development of the auto industry depends on fair competition rather than protectionism.
In fact, as early as September 13, the European Commission website revealed that the European Commission President von der Leyen in the European Parliament delivered the fourth "Union State of the Union" said that the European Commission will launch an anti-subsidy investigation against electric vehicles imported from China. It is reported that the European Commission will investigate whether to impose punitive tariffs above the EU standard 10% rate, the investigation will take up to 13 months.
For Chinese car companies, Europe can be described as a fertile ground for the export market of new energy vehicles, compared with the high tariff of 27.5% in the United States, the EU levied a tariff of 10% on imported cars. It is understood that the scope of the anti-subsidy investigation applies to all Chinese-made cars, including not only local Chinese brands, but also Tesla, Renault, BMW and other international brands produced in China.
Institutional downplaying
Reporters have previously interviewed a number of car companies in Europe on this incident, but including BYD, NiO, Xiaopeng, Lantu and other new energy vehicle companies have remained silent on this incident and did not respond.
However, in the agency's view, this behavior has limited long-term impact on China's auto exports.
According to the European Automobile Manufacturers Association (ACEA) data, in the first seven months of 2023, the EU's total sales of electric vehicles were 1.283 million, and China exported about 330,000 electric passenger vehicles to the EU, accounting for 25.7%, of which about 11.9 percentage points came from joint ventures and wholly foreign-owned brands, including Tesla, Volkswagen, BMW, Audi, Mercedes and so on.
Chinese local car brands accounted for about 13.9%, accounting for a relatively high proportion of brands including MG (4.8%), Volvo (3.7%), Polestar (2.3%), Wisdom motor (1.7%) and so on. Including BYD, NIO, Great Wall and other domestic car companies, the market share is less than 1%.
In the view of the people interviewed by the reporter, the local car companies generally have a low market share in Europe, and the main export market is in Southeast Asia, even if European sales are affected, it does not affect the overall sales situation. Guosheng Securities believes that even if the EU imposes countervailing duties, with reference to historical experience, the tariff rate on joint ventures and foreign brands will be low.
In addition, the agency also analyzed that in the first seven months of this year, with China's exports of electric vehicles to the EU of about 330,000, the export amount of about 9.37 billion US dollars, the average price of domestic sales of electric vehicles to the EU is about 28,400 US dollars/vehicle. According to IImedia think tank data, by the end of 2020, the average car price in the EU 27 + the UK is about 32,000 US dollars/car.
Moreover, the average price of domestic car exports to different countries varies greatly, such as the average price of car exports to Italy, France and other countries is below $20,000 / vehicle. Guosheng Securities believes that even if some countervailing duties are imposed, the price advantage of China's electric vehicles may still exist in some countries.
Therefore, in the view of the industry, even if the EU imposes anti-subsidy tariffs on Chinese electric vehicles, it will have an impact on China's auto exports, but it is relatively controllable. At the same time, from the perspective of the industry chain, the advantage of the EU auto industry chain lies in the traditional fuel vehicles, electric vehicles, intelligent vehicles started late, compared with China's electric vehicle technology advantage is obvious.
In the view of the agency, in recent years, European auto giants have continued to increase cooperation with Chinese electric vehicle companies, such as Volkswagen and Xiaopeng Automobile, which can partially avoid the negative impact of EU trade policies on China's auto exports.
Guosheng Securities believes that automobile electrification should be a long-term trend, China's electric vehicles have obvious advantages, and the continuation of automobile exports should be the benchmark judgment. Nomura Eastern Securities also believes that from a long-term perspective, the new energy vehicle industry will eventually move toward product competition, and it needs to meet the needs of electric vehicles to use "faster", "safer", "smarter" and "cheaper".
Who's innocent?
However, in the short term, the EU anti-subsidy investigation will still have a certain short-term impact. According to data from the European Automobile Manufacturers Association (ACEA), Tesla has the highest market share of 18 percent of pure electric vehicle sub-brands in 14 major European countries.
According to the data, Tesla's wholesale sales in China in the first half of this year were 464,000 vehicles. This means that more than 50% of the 889,000 electric vehicles Tesla delivered globally in the first half of the year came from the Shanghai Gigafactory. Earlier this year, EU officials said that nearly a fifth of all electric cars sold in Europe were made in China.
Earlier, there was market news that Tesla had intended to transfer production capacity for exports to Europe to the United States factory, or to avoid the impact of the anti-subsidy investigation. However, Tesla did not respond to this claim. Tesla is followed by Volkswagen, with a market share of 14%.
At the same time, in the view of the market, the anti-subsidy investigation may become an accelerator for Chinese car companies to go to sea. Geishi Automotive Research Institute analysts believe that if the EU launches anti-subsidy sanctions, Chinese car companies are bound to accelerate the process of localized plant construction and localized operations in Europe.
An industry insider interviewed by the reporter also bluntly said that the worst plan is that if Chinese car companies want to enter the European market on a large scale, they will choose to build factories in Europe to solve the problem.
Saic announced in early July that it is now planning to build a vehicle plant in Europe. Byd also said during the Munich auto show in early September that it was considering building its first vehicle plant in Europe to localize production and expected to complete the site selection work by the end of this year.