The European Commission has rejected offers from Chinese exporters to put a price floor on their electric vehicles exported to the EU. Several Chinese exporters submitted offers for “price undertakings”, which were deemed to be incompatible with World Trade Organization (WTO) and European Union rules, Commission Trade Spokesman Olof Gill confirmed. “Our review focused on whether the offers would eliminate the injurious effects of subsidies and could be effectively monitored and enforced. The Commission has concluded that none of the offers met these requirements,” Gill said at a media briefing in Brussels. “The Commission remains open to a negotiated solution, but it must fully comply with WTO rules and fully remedy the injurious effects of subsidies identified,” he said, adding that the ball was now in Beijing’s court to propose a counter offer that would meet those requirements. The announcement came as the dispute over EU tariffs reached fever pitch. The EU has complained that Chinese imports electric vehicles are too cheap as a result of industrial subsidies, and therefore create unfair competition for local models.
“As long as the European side demonstrates sincerity and works with China in the same direction, the concerns of both sides can be resolved through consultation,” a MOFCOM Spokesperson said, expressing hope for both sides to find a solution that aligns with the common interests of both parties and complies with WTO rules, which will promote the healthy development of China-EU economic and trade relations.
Concluding his visit to China, Spanish Prime Minister Pedro Sanchez emphasized that his government will try to avoid a potential trade war over electric vehicles and other issues. “I have emphasized we do not want a trade war, as it would benefit no one,” Sanchez said at a news conference in Kunshan, Jiangsu province, pledging Spain’s efforts to “build bridges” and find compromises through negotiation amid existing tensions. Prime Minister Sanchez reiterated Spain’s advocacy of open trade between Europe and China based on multilateral norms provided by the World Trade Organization for trade conflicts, with negotiated resolutions to conflicts that address the legitimate interests of both parties. “I must say Chinese EVs are truly advanced,” Sanchez remarked, saying he had an opportunity to drive a Chinese EV during his visit. “I believe the major European brands have a lot to learn from the technology and advancements made by Chinese brands in EVs. One of my main objectives during this visit was also to attract Chinese investment to Spain so that this Chinese investment can also establish itself in the form of a value chain in our country,” he added. Sanchez said his second visit to China in less than two years demonstrated the two countries’ shared commitment to maintaining regular high-level dialogue.
Also visiting China, Norwegian Prime Minister Jonas Gahr Store said Norway will not impose sanctions on Chinese electric vehicles, and is eyeing further cooperation with China in areas of common interest such as shipping, seafood and green transition. “Norway has no car production. We are not a member of the European Union, so we don’t have a common trade policy and will not impose sanctions unilaterally in this regard,” he said. Norway is aiming to become the world’s first country to end the sale of new gasoline and diesel cars by 2025. The Norwegian market has seen a rapid increase in the number of Chinese EVs, which have made a notable contribution to the country’s green efforts. According to the sales database of the Norwegian Road Federation, Chinese brands, including Volvo, increased their EV market share from 14% in 2023 to 23% in August this year. Prime Minister Store signed a joint statement in Beijing with Chinese Premier Li Qiang to establish a dialogue on green transition.
Meanwhile, the Chinese government urged Chinese EV makers to avoid investing in countries like India and Turkey. The Ministry of Commerce (MOFCOM) convened executives from more than a dozen electric car makers in July, under so-called “window guidance”, to discuss the risks of building plants abroad. Two industry officials with knowledge of the situation confirmed the meeting took place and said the Ministry told carmakers to better protect their assets and technology as they ramp up their expansion overseas, according to the South China Morning Post. In China, authorities use window guidance to give verbal or written instructions to companies on government policy. Generally, companies that fail to comply with policy directions delivered via window guidance will not be punished in accordance with the country’s rules and laws. During the meeting, the EV makers were encouraged to focus on knock-down assembly lines – where key components are produced at home before being shipped overseas where they are assembled closer to the consumption markets – rather than setting up supply chains and large-scale facilities outside the country.
The U.S. House of Representatives passed a Republican bill restricting electric vehicle tax credits that could jeopardize licensing deals between American car makers and Chinese EV battery companies. The bill, which is opposed by the White House, was passed as the last act of “China Week”, a Republican-led effort in the House to advance China-related legislation. About two dozen bills, including some sharply divisive ones, have cleared the Chamber last week. All legislation that passes the House must also clear the full Democrat-led Senate before it can be sent to the President’s desk to be signed into law. Sponsored by Representative Carol Miller of West Virginia, the “End Chinese Dominance of Electric Vehicles in America Act of 2024” would restrict EV tax credits from cars using battery technology licensed from China if the licensing deal is more than USD5 million.
Sales of China's NEVs saw significant growth in August, accounting for nearly half of total sales of new cars in China. Sales rose 30% year-on-year to 1.1 million units, while production reached 1.092 million units, up 29.6%. Sales of NEVs accounted for 44.8% of the total sales of new vehicles, according to the China Association of Automobile Manufacturers (CAAM). From January to August, NEV production totaled 7.008 million units, up 29% year-on-year, while sales rose 30.9% to 7.037 million units. NEVs represented 37.5% of total new car sales, according to the CAAM. The domestic retail penetration of NEVs reached 54%, a new high, according to the China Passenger Car Association (CPCA).
This overview is based on reports by the China Daily, the Global Times and the South China Morning Post.
