EU gets itself into an EV conundrum

THE European Union has put itself in a curious position in recent weeks when, at one and the same time, it launched an investigation into Chinese electric vehicle (EV) imports which allegedly enjoy state subsidies, and then announced cash incentives to help its own consumers buy European-built EVs and lock out China-made ones.

What triggered this bout of protectionism? China-based carmakers have gained a foothold in the EU’s electric car market. Overlooked, perhaps for political reasons, is the fact that more than 65 per cent of China’s electric car exports to Europe are from Tesla and other international brands, including German makes. China’s own brands had only 8 per cent of the EU’s electric car market in 2022. The European Commission projects that China’s brands could possibly increase their EV market share to 15 per cent by 2025.

France seems to be the most protectionist; that aforementioned cash incentive to help consumers opt for Euro-made EVs is a French initiative. Also in the works in France – a 100-euros-per-month EV leasing scheme from November. Again, climate action rules would be applied to ensure only EU-made cars will be eligible under the scheme.