China's electric charge: EU auto industry under threat
Ursula von der Leyen, President of the European Commission, announced on Wednesday her commitment to spearheading discussions on the future of the EU automotive industry, which is facing growing pressure from Chinese competition. She highlighted the necessity of identifying and implementing collective solutions to address these challenges.
At Wednesday's press conference, Ursula von der Leyen announced that the European Commission will focus on addressing the challenges confronting the EU automotive industry, emphasizing the need for effective solutions to overcome these issues.
She emphasized the importance of holding discussions on this topic, stating that finding and implementing a collective solution is essential. She confirmed that these discussions would be conducted under her leadership, highlighting the critical significance of the sector, which supports millions of jobs.
The European Union's automotive industry is facing increasing pressure from non-European competitors, especially China. In September, Brussels imposed temporary tariffs on Chinese cars whose production is subsidised by Beijing.
The largest manufacturer in the world
China is the largest producer of electric vehicles in the world. In 2023, its global exports of these cars increased by 70 per cent, reaching a value of £28 billion. The EU is the largest recipient of electric vehicles from China, accounting for almost 40 per cent of its exports.
In 2023, EU countries purchased Chinese cars worth £3 billion, almost 40 per cent more than the previous year. This has raised concerns in the Union and some EU capitals, as the prices of Chinese electric cars are usually about 20 per cent lower than models produced in the EU.
After an investigation launched in October 2023, the European Commission concluded that China is subsidising the production of electric cars, allowing them to be sold at artificially low prices. Subsidies cover the entire production chain—from batteries to direct grants for manufacturers.
This has raised concerns in the Union that the European automotive industry will not cope with unfair competition from China, just as other industries, like photovoltaic panel manufacturers, struggled in the past. Currently, for example, 90 per cent of panels sold in the EU come from China. A weakened European automotive sector would reduce the competitiveness of the economy and lead to mass layoffs.
EU tariffs on electric cars produced in China started to apply at the end of October and range from 7.8 to 35.3 per cent, depending on the manufacturer and the extent to which individual companies are supported by the state.
Von der Leyen after first call with Trump
During Wednesday’s conference, a question was posed as to whether the President of the European Commission intends to meet with Donald Trump, particularly given that some EU politicians have already visited him, including Secretary-General Mark Rutte, who met with the president-elect at his Mar-a-Lago estate late last week. Von der Leyen replied that she had already had an initial phone conversation with Trump.
She expressed her intention to collaborate constructively with the new American administration while acknowledging that key issues, such as security, defence investments, and competitiveness, are not solely the European Union's responsibility. She emphasized the importance of self-reliance, affirming her commitment to addressing the EU's specific needs in these areas.
The President of the European Commission also commented on the appointment of the new Commissioner for Mediterranean Affairs position for the first time, acknowledging that the Mediterranean region will gain a stronger position in EU policy as a result.
