Tesla also ends up under the EU investigation for Chinese subsidies for electric cars: this is what emerges from initial analysis, with the shares of Musk’s giant losing ground.
Tesla is among the victims of Europe’s challenge against China over the issue of subsidies for electric cars.
EU Executive Vice President Valdis Dombrovskis said on Tuesday that there was “sufficient prima facie evidence” to justify investigating imports of battery-powered vehicles from China, which Brussels fears could overwhelm the bloc’s auto industry.
In detail, he specified that in the crosshairs of subsidies considered unfair, there would not only be Chinese brand electric cars but also "vehicles from other manufacturers if they receive subsidies for production", thus answering the question of whether Tesla or Geely, the owner of the Swedish Volvo, could fall under the investigation.
The shares of Musk’s giant are losing more than 1.70% in pre-market trading. Will Tesla be targeted by Europe from an anti-China perspective?
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The aim of the EU investigation, as announced, will be to determine whether, and to what extent, China has subsidized Tesla and domestic manufacturers including BYD Co., SAIC Motor Corp., and Nio Inc., and to adopt any compensatory measures necessary to balance the automotive sector in which the European Union industry appears to be at a competitive disadvantage.
Tesla already exports electric cars to Europe from its gigafactory in Shanghai, although those numbers could decline following the opening of a facility in Berlin last year, analysts say. Around a fifth of all-electric vehicles sold in Europe are produced in China.
In the first half of this year, Chinese-made vehicles accounted for 11.2% of electric vehicles sold in Germany, according to a report from the Center for Strategic and International Studies this month.
Musk’s giant began exporting Model 3 sedans built at its Shanghai factory in late 2020, less than a year after starting production at its first overseas auto plant. By July 2021, the company designated the facility as its primary vehicle export hub.
According to Schmidt Automotive Research, in the first seven months of this year, Tesla sold approximately 93,700 made-in-China vehicles across Western Europe, accounting for approximately 47% of its total deliveries. The next largest exporter of electric vehicles from China to Europe was the UK’s SAIC (Chinese) MG, with around 57,500 registrations.
Tesla has enjoyed advantages in China that other international companies have struggled to achieve, most notably the state blessing of entirely owning its domestic operations, rather than having to share custody with a local joint partner venture.
Tax breaks, low-cost loans, and other forms of assistance have helped turn China into Tesla’s most important market outside the United States.
These and other forms of support that the dragon provides to domestic producers, including credits from state banks, capital provisions from state investment funds, and supplies of land and electricity, are now under EU control. Chinese automakers also benefit from subsidies in related sectors across the value chain, including batteries and software.
Some European companies, such as BMW AG and Renault SA, which run joint ventures with Chinese manufacturers, will also be included in the investigation, along with all carmakers that produce in China and export to the EU, according to reports.
Original article published on Money.it Italy 2023-09-26 15:43:16. Original title: Tesla presa di mira nella sfida Ue-Cina sulle auto elettriche
