European automotive industry braces for Chinese competition

At Wednesday's press conference, Ursula von der Leyen stated that the European Commission will focus on the future of the EU automotive industry. She commented on the challenges facing the industry, that must be tackled.

She added that conducting discussions on this topic is crucial. She announced the need to find a common solution and implement it. Von der Leyen promised to lead these discussions, which will take place under her leadership. She believies this is a very important sector with millions of jobs.

The automotive industry in the European Union is facing increasing pressure from non-European competitors, especially China. In September, Brussels imposed temporary tariffs on Chinese cars whose production is subsidized by Beijing.

China is the largest producer of electric vehicles globally. Its exports of these cars increased by 70% in 2023, reaching a value of 34.1 billion dollars. The EU is China's largest recipient of electric vehicles, accounting for almost 40% of its exports.

In 2023, EU countries purchased Chinese cars worth approximately 5.1 billion CAD, almost 40% more than the previous year. This has raised concerns in the Union and some EU capitals, as the prices of Chinese electric cars are usually about 20% lower than models produced in the EU.

After an investigation launched in October 2023, the European Commission concluded that China is subsidizing the production of electric cars, allowing them to be sold at artificially low prices. Subsidies cover the entire production chain—from batteries to direct grants for manufacturers.

This has raised concerns in the Union that the European automotive industry will not cope with unfair competition from China, just as other industries, like photovoltaic panel manufacturers, struggled in the past. Currently, for example, 90% of panels sold in the EU come from China. A weakened European automotive sector would reduce the competitiveness of the economy and lead to mass layoffs.

EU tariffs on electric cars produced in China started to apply at the end of October and range from 7.8% to 35.3%, depending on the manufacturer and the extent of state support.

During Wednesday's conference, a question was raised about whether the President of the European Commission intends to meet with Donald Trump, given that some EU politicians have already visited him, including Secretary-General Mark Rutte, who met with the president-elect at his Mar-a-Lago estate late last week. Von der Leyen replied that she had already had an initial phone conversation with Trump.

She added that she intends to work constructively with the new American administration but also noted that she has no illusions that certain issues, which are central to today's discussions, such as security and defense investments or competitiveness, are the sole responsibility of the European Union. Von der Leyen said that "We cannot rely on anyone here. We know what our needs are, and my work will focus on that."

The President of the European Commission also commented on the appointment of the new position of Commissioner for Mediterranean Affairs for the first time, acknowledging that the Mediterranean region will gain a stronger position in EU policy as a result.