Tesla is one of the manufacturers that could be most affected by the investigation announced by the European Commission into subsidies granted to electric cars from China.
Bloomberg reports on Tuesday that Tesla risks being one of the manufacturers most affected by the investigation announced by Brussels into subsidies granted to electric cars sold in the European Union from China.
According to sources close to the matter, the Elon Musk-led manufacturer is one of the companies identified in a report gathering evidence that it likely benefited from subsidies granted to vehicles from the Asian giant that were sold on the Old Continent.
The investigation aims to determine the extent to which China supports car manufacturers, such as Chinese BYD, SAIC and Nio but also Tesla, and adopts measures that work to achieve a level of competition against car manufacturers that produce vehicles in Europe. European Commission President Ursula von der Leyen announced the investigation on September 13. The investigation threatens to shake up the auto industry, as European manufacturers risk retaliation from Beijing over cars they export to China. On the other hand, the European Union is the most attractive market for Chinese manufacturers, who have increasingly invested in exporting electric cars to the European bloc.
For example, Tesla exports the Model 3 produced at its massive factory in Shanghai, with many units destined for the European market. In the first seven months of this year, Tesla will have sold nearly 94,000 Chinese-made vehicles in Western Europe, accounting for 47% of deliveries, according to data from automotive research firm Schmidt.
SAIC, through the MG brand, will have exported nearly 57.5 thousand vehicles to Europe by the end of July.
Tesla has received many benefits from Beijing, namely tax breaks, cheap loans and other benefits that have helped China become the brand’s second-largest market, just after the United States.
Beijing also supports local automakers by providing credit from state-owned banks, capital injections from government investment funds, and access to land and electricity at low prices. In addition, China also supports battery and software manufacturers to equip cars.
The investigation will also include some European manufacturers that have “joint ventures” with Chinese car manufacturers, such as BMW or Renault.
Tesla shares fell 1.64% to $242.95 in pre-market trading.
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