Europe probes China’s electric car subsidies as imports soar

The European Union is launching an investigation into China’s state support for makers of electric vehicles as soaring imports of their cars stoke fears for the future of European auto manufacturers.

Speaking to the European Parliament Wednesday, European Commission President Ursula von der Leyen said Europe was open to competition but “not for a race to the bottom.”

“Global markets are now flooded with cheaper electric cars and their prices [are] kept artificially low by huge state subsidies,” von der Leyen said. “So I can announce today that the commission is launching an anti-subsidy investigation into electric vehicles coming from China.”

Europe levies a duty of 10% on cars imported from China. That compares with duty of 27.5% in the United States, and China’s manufacturers have taken advantage to carve out a significant and rapidly growing foothold in the European market.