EU considers EV subsidies to counter Chinese competition

THE EUROPEAN UNION IS PLANNING TO SUBSIDIZE ELECTRIC VEHICLES IN AN EFFORT TO COMBAT CHINA.

IMPORTS OF CHEAPER CHINESE EVS HAVE BEEN PROJECTED TO COST EUROPE’S AUTOMAKERS NEARLY 8 BILLION DOLLARS BY 2030 ACCORDING TO AN ALLIAZ TRADE STUDY.

IN RESPONSE TO THAT INFLUX, THE E.U. RAISED TARIFFS ON CHINESE ELECTRIC MODELS IN JUNE-

WITH OFFICIALS CALLING THEIR PRICES ARTIFICIALLY LOW DUE TO SUBSIDIES FROM BEIJING-

LEAVING EUROPE’S OWN EV MANUFACTURES UNABLE TO COMPETE.

BUT NOW THE EU HAS DETERMINED FURTHER ACTION IS NEEDED-

AND HAS BEEN DISCUSSING INSTITUTING AN EV SUBSIDY OF THEIR OWN.

THE EUROPEAN COMMISSION’S EXECUTIVE VICE-PRESIDENT REVEALED DURING THE WORLD ECONOMIC FORUM IN DAVOS THAT AN INCENTIVE SCHEME TO PROVIDE SUPPORT ACROSS EU MEMBER STATES IS BEING CONSIDERED.

EMPHASIZING THE NEED FOR A UNIFIED EUROPEAN APPROACH AND CAUTIONING AGAINST A FRAGMENTED MODEL OF NATIONAL SUBSIDIES.

CURRENTLY, EV INCENTIVES VARY WIDELY ACROSS THE EU-

WITH SOME COUNTRIES OFFERING NO PURCHASE SUBSIDIES AT ALL, ACCORDING TO THE EUROPEAN AUTOMOBILE MANUFACTURERS’ ASSOCIATION.

HOWEVER, THE WORLD TRADE ORGANIZATION’S RULES ON SUBSIDIES-

WHICH THE EU IS REQUIRED TO FOLLOW-

COULD COMPLICATE THIS PLAN TO ASSIST EUROPE’S EV MAKERS.

BECAUSE THE WTO MANDATES SUBSIDIES DON’T GIVE AN UNFAIR ADVANTAGE TO DOMESTIC PRODUCERS OR HINDER INTERNATIONAL COMPETITION-

ENACTING A SUBSIDY THAT DOESN’T ALSO BENEFIT CHINESE AUTOMAKERS IS GOING TO BE A CHALLENGE.

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