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EVs: The Core of Trade Frictions Between China and Europe


Why is it in the news?

  • Trade tensions between China and the European Union (EU) revolve around the export of affordable Chinese electric vehicles (EVs) and the limited access European companies have to Chinese markets.

More about the news

  • China’s growing dominance in the EV market has led to concerns in Europe, where Chinese-made EVs are projected to account for over a quarter of all EV sales in 2024.
  • The EU has raised issues regarding unfair market access and initiated investigations into subsidies benefiting Chinese EV manufacturers, which China has criticized as protectionism.
  • Ahead of President Xi’s visit to Europe, the European Commission (EC) notified major Chinese EV makers—BYD, SAIC, and Geely—that they had not provided sufficient information to anti-subsidy investigators, potentially leading to higher tariffs on Chinese EV imports.
  • These tensions coincide with declining exposure in China for European companies, including carmakers like Volkswagen and Renault. In response, China has launched its own investigations, such as an anti-dumping probe into imports of European brandy.
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