The European Union is investigating three Chinese manufacturers, excluding Tesla

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BYD, Geely and SAIC are being investigated by the European Union. But Tesla didn’t do that, and the company’s response was strong.

The global market is full of cheap Chinese cars. European Commission President Ursula von der Leyen said that the prices of these cars are artificially low due to huge government subsidies. in September.

This was the starting point for the investigation into Chinese state aid to automakers.

The EU fears that if China subsidizes Chinese companies, these companies could gain an unfair competitive advantage in the European market – through abnormally cheap cars.

The big three minus one

Just before the weekend, it became clear which companies would be subject to scrutiny.

The chosen ones are

● jelly (Volvo, Zyker, Polestar, Lotus, etc.),

● Psych engine (MG, Maxus, etc.) and

● tender.

Now companies have to answer a large number of questions posed by the European Commission.

according to this report The three manufacturers respectively account for 1.5 percent (Geely), 16 percent (BYD), and 26.3 percent (SAIC) of Chinese electric vehicle exports.

but:
Tesla, via the factory in Shanghai, accounts for a whopping 39.2 percent stake. Therefore, the American company is the largest exporter of Chinese-made electric cars.

Therefore, Tesla’s lawyers react sharply to the fact that the investigation will concern only other brands, writes S POLITICO.

Same “punishment” for everyone

The logic is as follows:

● The investigation by Geely, SAIC and BYD is likely to reveal some level of financial support from China.

● This level will form the basis for sanctions imposed by the European Union.

● Sanctions will be applied to all companies exporting electric vehicles from China.

● Tesla’s China operations barely benefited from the subsidies across the three Chinese companies in their entirety, and would probably have dragged the ‘cut’ down.

● Tesla could be equally subject to financial penalty as other manufacturers.

This was confirmed by the Swedish spokesman for the committee, Olof Gill.

“collective punishment”

Tesla’s lawyers from Steptoe & Johnson wrote that the decision was “wholly unreasonable.”

“The Commission’s decision to exclude the largest source is unprecedented and completely unsustainable,” is the message.

In the selection process, the European Commission assessed the volume of exports, but also hinted at companies that might be better qualified for government subsidies. Tesla believes this deviates from all previous investigations, where, according to the lawyers, the EU Commission “explicitly rejected” that factors other than export numbers were relevant.

– It is understandable that Tesla is very disappointed. Think of it as collective punishment, says Matthias Schmidt, an auto market analyst POLITICO.

– We do not automatically include all companies that want to, says Gill at the European Commission.