September 13, 2023

In the midst of an invasion by Chinese electric cars, European Commission President Ursula von der Leyen launched an anti-subsidy investigation Wednesday against Chinese imports. It's a step that risks snowballing into a trade war that could make a tussle over solar panels with Beijing a decade ago look like a tea party.

"Global markets are now flooded with cheaper Chinese electric cars. And their price is kept artificially low by huge state subsidies,” von der Leyen said in her annual State of the Union address. “This is distorting our market.”

The stakes couldn't be higher: China's massive investments have established it as the dominant maker of the battery technology that powers clean cars. Global sales of electric vehicles are forecast to grow by nearly a third in 2023 alone to nearly more than 14 million units — worth $560 billion — and without fair competition the EU sees its industry losing out.

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