It is no doubt that China has a commanding lead in the worldwide market for electric vehicles. However, according to reports, Beijing is ordering businesses to halt their active hunts for production locations in the area, sign new agreements and generally maintain a low level of activity while discussions over EVs are underway.
According to sources, who asked to not be named because the discussions are confidential, the State owned Dongfeng Motor Group has already put a stop to plans to possible manufacturer automobiles in Italy in reaction to the warnings.
Although it is not a hard and fast rule, China's instruction could exacerbate tensions as the two powers compete for control of the automobile sector. Earlier this month, the European Union voted to raise tariffs on Electric Vehicles (EV) made in China to 45% claiming Beijing unfairly subsidies to its carmakers. China has vehemently disputed this assertion and has now vowed to impose its own tariffs on the European diary, brandy, pork, and automobile industries.
According to one of the sources, Beijing is also worried about the possible overcapacity as a result of Europe's rocky EV transition and low demand for Chinese cars in the market, even if Dongfeng Motor told Italian officials that Rome's support for the EU tariffs was the reason for its change.
This tension rose when customs taxes levied by the European Union increased significantly.
Thus, it is can be said that there is high tension between the European Union and the Chinese Electric Vehicle industry.
