There is no doubt that China is the absolute leader in the global electric vehicle market. However, Beijing is reportedly ordering companies to stop actively looking for production sites in the region, sign new deals and generally keep activity levels low while discussions about electric vehicles take place.
State-owned Dongfeng Motor Group has halted plans to build cars in Italy in response to the warnings, according to the sources, who asked not to be identified because the discussions are confidential.
While it’s not a hard and fast rule, China’s directive could heighten tensions as the two powers battle for control of the auto industry. Earlier this month, the European Union voted to increase tariffs on Chinese-made electric vehicles (EVs) to 45%, claiming Beijing unfairly subsidizes its automakers. China strongly rejects the claim and has vowed to impose tariffs on European dairy products, brandy, pork and the automotive industry.
Beijing is also concerned that Europe’s difficult transition to electric vehicles and sluggish demand for Chinese cars could lead to overcapacity, one of the sources said, although Dongfeng told Italian officials that Rome’s support for EU tariffs was the reason for the change.
This tension heightened when tariffs imposed by the EU increased significantly.
It can be said that there is a highly tense relationship between the EU and the Chinese electric vehicle industry.
