China and EU agree to consultations on subsidy investigations for electric cars

China’s Commerce Minister held a video call with an Executive Vice President of the European Commission.

China and the European Union will discuss the EU’s investigations into Chinese electric vehicles (EVs) following the announcement of provisional tariffs.

On June 22, China’s Minister of Commerce Wang Wentao was invited to a video call with Valdis Dombrovskis, Executive Vice-President of the European Commission.

Both sides have agreed to start consultations on the EU’s anti-subsidy case against Chinese electric vehicles, according to a brief statement on the Chinese Ministry of Commerce’s website.

On 12 June, the European Commission announced in advance the level of provisional anti-subsidy duties to be imposed on imports of battery electric vehicles (BEVs) from China.

If the talks with the Chinese authorities do not lead to an effective solution, these provisional anti-subsidy duties would be introduced from July 4, the European Commission said at the time in a statement.

The definitive measures should be implemented within four months of the imposition of the provisional duties, the European Commission said in a statement.

A spokesman for the Chinese Ministry of Commerce said after the EU statement was published that China was extremely concerned and dissatisfied. Chinese industry was also deeply disappointed and firmly rejected this.

China calls on the EU to immediately correct its wrongdoings and properly manage economic and trade tensions through dialogue and consultations, the spokesman said.

The EU had originally imposed a 10 percent tariff on electric cars imported from China. The provisional tariffs now announced apply to different car manufacturers at different rates.

The sampled companies BYD, Geely and SAIC, which cooperated in the investigation, will be subject to additional tariffs of 17.4 percent, 20 percent and 38.1 percent respectively.

Other Chinese BEV manufacturers that cooperated with the investigation but were not included in the sample will have to pay a weighted average tariff of 21 percent. Nio (NYSE: NIO) and Xpeng (NYSE: XPEV) fall into this category.

For all other BEV manufacturers in China that did not cooperate in the investigation, a residual tariff of 38.1 percent would apply.