Photo: Wikipedia/JengtinchenChinese electric cars can be seen on the streets of all continents. Their price is artificially lowered by huge government subsidies, which creates problems for European producers on the market. Brussels has serious objections
What used to be Chinese refrigerators, hair dryers and washing machines in EU-China relations are now Chinese electric cars.
Electromobility is one of the reasons for the tension ahead of tomorrow's summit of the European Union and China in Beijing, where the political leaders of Beijing and Brussels will try to find answers to the question of how the EU and China can find a common language, when they are mutually defined as rivals.
European Commission President Ursula von der Leyen and Council of Europe President Charles Michel will travel to Beijing together. For the first time in four years, the European and Chinese political leaders will sit down at the same table, he writes Deutsche says.
Chinese electric cars can be seen on the streets of all continents. Automakers from Europe, Japan and the United States have dominated the electric car market for decades, but China is now happy to emphasize that it is the world's largest electric car maker and is leaving its former competition behind.
According to Chinese statistics, the country exported more than half a million electric cars in the first half of this year. This is a growth of 160 percent compared to the same period of the previous year.
How are they cheaper?
As was the case with Chinese home appliances 20 years ago, Chinese electric cars are primarily cheap. The European Commission believes that this is possible only because of subsidies.
"The price of those cars is artificially lowered by huge state subsidies," says Ursula von der Leyen, and that this creates problems on the European market, that world markets are flooded with "cheap" Chinese electric cars.
In September, she announced an investigation into Chinese subsidies. The president of the European Commission is likely to have to justify her decision to investigate subsidies for Chinese electric cars, as it has caused a major outcry in China's top brass.
In September, China's Ministry of Commerce slammed the move as "pure protectionism" that disrupts and distorts global automotive supply chains. The statement added that despite this, China supports green mobility and Europe in the fight against climate change.
The Chinese Elon Musk
How is it "time" wrote earlier, billionaire William Li (48) is considered China's Elon Musk. Not without reason. He is not only very rich and successful, but he has the status of a pop star in his country.
His start-up project could challenge the entire European car industry in a similar way that Musk did with Tesla.
His goal is mass production, conquering the global market and sovereign rule over the auto industry. Lee confirmed for the German "Spiegel" that his company Nio will launch two more brands, one of which will be aimed at the European market and in the price segment below 30.000 euros.
"Currently, 26 Chinese electric car manufacturers are planning to enter the German market by 2025," says Bernd Diepenzeifen from the consulting firm KPMG. "That number alone shows what will happen." Although the initial number of cars produced will be low, this means that the share of German manufacturers will have to decline. That's math."
All the world's largest manufacturers of automotive drive batteries are from China. "China has access to raw materials and has the largest production capacity and markets."
Free market competition
China's leadership in the electric car market is exposed to fierce competition. Not only trade and engineering skills are important, but also political issues.
Xiao Feng, a professor at the China-German College of Applied Science (CDHAW) at Shanghai Tongji University, even during the 2022 pandemic pointed to the geopolitical factor in that economic branch.
"Competition of the system and differentiation of values" are, according to him, the biggest challenges for the automotive industry. "China and Europe are driving forces in the field of electromobility," Feng said in October 2022 at an automotive symposium in China. But, as he added, "they are also competition."
The European announcement of the review of Chinese subsidies is now an expression of systemic competition between Brussels and Beijing. In 2020, the European Union introduced a mechanism for reviewing foreign direct investments. Investments that bring a risk to security and public order and peace can be prevented.
The mechanism serves to make it difficult for Chinese investors to access European critical infrastructure. Besides that. This spring, Ursula von der Leyen called for a similar review mechanism for European investments in China, to prevent the capital and expertise of European companies from "improving the military and intelligence capabilities of those who are also our systemic competitors."
BG/Deutsche Welle/Vreme
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