EU Crackdown on Chinese Electric Cars May Hurt European Consumers and Automakers
© AP Photo / Andy WongAn electric powered car is seen on display at the Electric Car and Clean Energy Saving Auto Show in Beijing, China, Tuesday, July 14, 2009
© AP Photo / Andy Wong
The European Union has initiated a probe into China’s subsidies for electric cars, with European Commission President Ursula von der Leyen announcing the launch of this inquiry on Wednesday.
While EU states and European automakers deem this move as a "positive signal", according to local media reports, China argued that the probe is primarily aimed at protecting the EU industry "in the name of 'fair competition'" and "will have a negative impact on China-EU economic and trade relations."
Commenting on this development, Thomas W. Pauken II, geopolitical commentator and consultant on Asia-Pacific affairs, has remarked that it seems rather strange that Europe, despite being "very supportive of climate change issues," now makes moves that may discourage the production of electric vehicles simply because they are made in China.
"The EVs are playing a crucial role in helping to transition away from fossil fuels. China has built a lot of EVs, and they've exported them to the US or European markets. And I just find it really strange that now they're trying to block China's EVs when in fact a lot of European and US auto manufacturers are also transitioning to EVs as well," Pauken said.
He further observed that the EU’s concerns about the Chinese subsidies appear a bit peculiar, considering how "notorious for subsidizing their own industry" the European bloc's member states are.
"Just take a look at Airbus. Airbus exists as a French airplane manufacturer, mostly because of the subsidies they receive from the French government and probably from other parts of Europe as well," Pauken told Sputnik. "So using the complaints about subsidies coming from Europeans of all people, where their governments a lot of times subsidize their companies, it's rather odd that they would criticize China for doing the same thing."
The plans of the European automotive giants such as Mercedes Benz and Volkswagen to sell their electric vehicles to China might also hit a snag if the EU were to try and make moves that would lead to a trade war with Beijing.
"If they have plans to sell to China, but now there's trade wars, this is going to be a very difficult situation for European and US auto manufacturers," he remarked.
According to Pauken, such trade wars are unlikely to affect Tesla, which enjoys "a lot of success in China," but some of the other automotive manufacturers, those who are "involved with Europe," may not fare so well.
As for what this move would mean for ordinary consumers in Europe, it would seem that they would have to pay more for this particular commodity.
"China has found ways to manufacture, mass produce EVs at a lower cost, and they are actually more reliable on their batteries than the European and the US automakers. And now they're going to get lower quality. And it's going to be more expensive for them to buy EVs because they won't be able to buy Chinese EVs," Pauken explained.
He also pointed out that there is a matter of supply chains to consider since China "is playing a huge role in lithium-ion batteries, EV batteries."
"Obviously, if these trade wars increase, the European EV manufacturers, as well as the US EV manufacturers are going to have a hard time mass producing their EV batteries. Most of them come from China," he added.
Noting that it is possible that the US "also blocks Chinese EVs," Pauken lamented that "it always runs back to the US and the EU thinking they're hitting China when in actuality they're shooting themselves in the foot.”
"They think they're hurting China, but they're hurting themselves because the Europeans were one of the biggest leaders of EVs before China got into the game. It was the European auto manufacturers like Volkswagen, Mercedes, BMW. They were all really big into EVs mass production. So they're going to lose out on the China market," he mused.
He also speculated that von der Leyen being "very critical of China in recent months" may be explained by her alleged eagerness to take a high role in NATO soon.
"Obviously, if she is going to become the secretary general of NATO, she's going to take a very tough line against Russia and China. So basically, she is doing these trade wars just so that she can secure her promotion to NATO," he said.