France would be happy if China’s biggest electric-vehicle maker BYD wants to open a factory in France, a senior minister said on Monday.
Finance Minister Bruno Le Maire made the remark on Monday, while China’s President Xi Jinping was on a rare state visit to Paris.
“France welcomes all industrial projects. BYD and the Chinese auto industry are very welcome in France,” Le Maire said at a meeting with car sector executives.
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Le Maire’s remarks could upset carmakers in Europe and political heavyweights in Brussels, given fears that Chinese EVs could dominate sales in coming years because of their cheap prices and EV expertise acquired over recent years.
But some have wondered if it may be part of a strategy to appease the Chinese if the EU imposes heavy tariffs on Chinese carmakers because of the state subsidies they have received over many years.
EU probe into Chinese subsidies
The minister’s comments come at a time when the European Union is investigating state subsidies for Chinese carmakers, including BYD, and whether to impose tariffs to protect the local auto sector.
The European Commission launched an investigation last September into whether to impose punitive tariffs to protect European Union producers against cheaper Chinese electric vehicle imports because they have benefitted from state subsidies.
China has hit out at the European investigation, claiming it is a violation of global trading rules, alleging it has a lack of transparency and that the outcome is predetermined.
Shi Yonghong, vice-president of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME), said last month he was concerned the findings would be “distorted and unobjective”.
His comments came after China’s top trade official warned Brussels against protectionism.
The CCCME, which is representing 12 Chinese EV producers in the case and had a hearing with the European Commission in mid-April, said its prime concern was over the EU’s executive’s choice of companies to sample.
These are BYD, Geely and SAIC. But it does not include the top exporters from China to the EU which, according to campaign group Transport and Environment, were Tesla and Renault’s Dacia in 2023.
The EU has been warned it will need to impose weighty tariffs on Chinese electric vehicles if it is serious about attempting to stem their flow into the bloc, The Financial Times reported.
Researchers at the Rhodium Group say any punitive action is likely to be too weak to deter Chinese carmakers, the story went on, with Brussels’s anti-subsidy probe into Chinese EVs expected to conclude within weeks.
“Duties in the 40-50% range – arguably even higher for vertically integrated manufacturers like BYD – would probably be necessary to make the European market unattractive for Chinese EV exporters,” the Rhodium report cautioned.
- Reuters with additional input and editing from Jim Pollard
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