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Exclusive-EU investigators to inspect China’s BYD, Geely and SAIC in EV probe – source

by Jessica Weisman-Pitts
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2024 01 12T101701Z 2 LYNXMPEK0B0B9 RTROPTP 4 CHINA EUROPE ELECTRIC

Exclusive-EU investigators to inspect China’s BYD, Geely and SAIC in EV probe – source

SHANGHAI/BRUSSELS (Reuters) -European Commission investigators are to inspect Chinese automakers in the coming weeks as part of a probe into whether to impose punitive tariffs to protect European electric vehicle (EV) makers, three people involved in the process said.

The inspectors will visit BYD, Geely and SAIC, two sources said, with one of them saying the investigators will not visit non-Chinese brands produced in China, such as Tesla, Renault and BMW.

The probe, launched in October and scheduled to last 13 months, seeks to determine whether cheaper, Chinese-made EVs benefit unfairly from state subsidies. Called protectionist by China, the investigation has escalated tensions between Beijing and the EU.

The European Commission confirmed it would carry out the visits.

“The Commission selected a representative sample of Chinese and EU producers, which have already replied to the questionnaires,” Olof Gill, European Commission Spokesperson for Trade said.

“The Commission will carry out verification visits at their premises in January-February 2024,” he said.

China’s commerce ministry, BYD and SAIC did not immediately respond to requests for comment. Geely declined to comment but cited its October statement that the company followed all laws and supported fair market competition globally.

One source said the investigators have arrived in China, while another said visits are scheduled for this month and February.

The visits are for verification work – on-site inspections checking responses the automakers gave to questionnaires – one source said. European Commission documents for the probe say it is in the “initiation stage”, with verification visits due by April 11.

The sources asked not to be named as details of the visit were confidential.

Last week, China opened an anti-dumping investigation on brandy imported from the European Union, a step that appeared targeted at France, which backs the EV probe. Popular Chinese models exported to Europe include SAIC’s MG and Geely’s Volvo.

Chinese-made vehicles’ share of the European Union’s EV market has risen to 8% and could reach 15% in 2025, with these EVs typically selling for 20% less than EU-made models.

In October, China’s Great Wall Motor said it was the first automaker to submit responses to the EU subsidy investigation.

Relations between China and the EU have been strained by factors including Beijing’s closer ties with Moscow after Russia’s invasion of Ukraine. The EU is seeking to reduce its reliance on the world’s second-largest economy, particularly for materials and products needed for its green transition.

At the same time Chinese EV makers, from market-leader BYD to smaller rivals Xpeng and Nio, are stepping up efforts to expand overseas as competition intensifies at home and domestic growth eases. Many have made sales to Europe a priority.

China is estimated to have overtaken Japan as the world’s largest auto exporter last year, shipping 5.26 million vehicles valued at about $102 billion, a Chinese auto association said this week.

(Reporting by Zhang Yan in Shanghai, Philip Blenkinsop in Brussels and Maria Martinez in Berlin; Additional reporting by Laurie Chen in Beijing; Writing by Brenda Goh; Editing by William Mallard, Kirsten Donovan)