Tesla a Likely Beneficiary as EU Prepares to Launch Inquiry into China EV Subsidies
The European Union plans to initiate an inquiry into the subsidies that China offers its electric vehicle manufacturers.
In a speech today, President Ursula von der Leyen said "Global markets are now flooded with cheaper Chinese electric cars. And their price is kept artificially low by huge state subsidies. This is distorting our market. And as we do not accept this from the inside, we do not accept this from the outside. So, I can announce today that the Commission is launching an anti-subsidy investigation into electric vehicles coming from China."
Chinese bureaucracy has played a pivotal role in establishing the country as the largest electric vehicle market globally. It has injected substantial financial resources into subsidies to secure an advantage in the industry.
Automakers worldwide are encountering escalating competition within their domestic markets as Chinese brands continue to gain market share.
The move here will help protect the likes of Volkswagen, Mercedes-Benz and Stellantis, whose electric vehicles are facing pressure from Chinese manufacturers. However, perhaps, the biggest beneficiary here will be Tesla, which has about a 19% European market share. Tesla's Model Y is the region's best-selling EV.
Russell Shor
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.
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