The International Motor Show, Europe’s largest automobile exhibition, is usually dominated by the continent’s top combustion engine brands, including BMW, Mercedes and Porsche. At the most recent expo in Munich last week, the spotlight was firmly on electric vehicles — a sector in which the EU’s auto industry has fallen woefully behind China.
The bloc is determined not to let car production go the way of its solar industry, which was overwhelmed by fierce competition from cheap Chinese imports a decade ago. On Wednesday, European Commission President Ursula von der Leyen announced an anti-subsidy probe into China’s electric vehicle industry, marking an escalation of tensions with Beijing as the bloc aims to reduce its dependence on China.
It should come as no surprise that the Chinese state has heavily subsidised its electric vehicle industry. From raw materials through to production, it has been cornering the supply chain for decades. It has acted in an anti-competitive manner and it is fair for the EU to investigate Chinese practices. But, ultimately, retaliatory measures would not be in its interests.