In brief

On 13 September 2023, European Commission President Ursula von der Leyen announced that the Commission will investigate the subsidization of battery electric vehicles manufactured in China and imported into the EU. There is an expectation that the Commission will initiate the investigation soon and therefore, it is important to think through the live issues now.

In depth

In this investigation, the Commission will specifically investigate whether (1) companies that manufacture EVs in China and export these EVs to the EU have received subsidies from the Chinese government; and (2) imports of subsidized EVs originating in China into the EU (threaten to) cause harm to the economic health of producers that manufacture EVs in the EU. If this is the case, the Commission will impose anti-subsidy (or countervailing) duties on imports of EVs originating in China into the EU for, typically, five years.

While the Commission routinely conducts anti-subsidy investigations, this case is unique because (1) the Commission will initiate this investigation without there having been a formal complaint lodged by a manufacturer(s) of EVs in the EU; and (2) it involves many companies that manufacture and sell EVs (and other cars) both in China and in the EU. From a strategic perspective, this backdrop means that the investigation, the way it will unfold for various companies in this space, and the impact on your business require careful consideration.

Once the investigation is initiated, the deadlines for participating (should this be the chosen strategy) are very short. Given the impact that this investigation will likely have on the market, it is thus important to frontload thinking through the live issues now. If this would be of interest, please reach out for an initial discussion to any of our contacts who routinely assist and advise companies in these types of investigations.