Europe prepares to introduce tariffs on Chinese electric cars

The European Union (EU) has accused the Chinese government of unfairly subsidising the production and export of budget-priced electric cars – and is preparing to apply tariffs for new, and existing examples already on European roads.

An EU investigation opened in October has allegedly found "sufficient evidence tending to show that imports of [electric cars] concerned from the [People's Republic of China] are being subsidised."

It refers to the subsidies as "countervailable", implying they have been specifically applied to keep retail prices of Chinese electric cars low in Europe – rather than a general subsidy to boost car production of all types, to be sold in any country.

Imports of Chinese-built electric vehicles increased by more than 10 per cent over the four-month course of the initial investigation – with one-third of electric vehicles exported from China now headed to Europe, according to Bloomberg.

MORE: China and European Union clash over cheap electric cars cashing-in on subsidies

European regulators have taken their first steps towards tariffs on Chinese-made electric cars – both on newly-built examples, and retrospective fines on vehicles already on the road.

The EU has directed customs authorities to "register imports" of electric vehicles into the region from China so "if the necessary conditions are fulfilled", tariffs can be "levied retroactively" on cars already in Europe.

In Germany the cheapest MG 4 costs €5000 less than the most affordable Volkswagen ID.3 – and similar to a Renault Megane E-Tech, which is a more compact vehicle with a smaller battery and less powerful electric motor.

"There is also a risk that an increasing number of [European] Union producers will suffer from diminishing sales and reduced production levels if imports continue at the current increased levels at allegedly subsidised prices from the PRC," the EU report claims.

"It is clear that that risk will negatively impact employment and the overall performance of [European] Union producers. This would constitute injury which would be difficult to repair."

A date is not given for when tariffs may be introduced – and how much they would add to prices – as the investigation is still ongoing.

According to Reuters, the China Chamber of Commerce to the EU has "voiced its disappointment with the proposed mandate," and said the “recent surge in Chinese EV imports mirrors the increasing demand for electric vehicles in Europe."

Europe's probe into Chinese electric cars after the US announced an investigation into whether Chinese cars sold in the US are transferring data back to their home country, or could be remotely disabled.