(Yicai) Sept. 19 -- Germany is staying on the sidelines regarding the European Union’s announcement that it will launch an anti-subsidy investigation into China’s electric vehicles, the head of an incubation center set up by the Guangzhou Development District in the German city of Heidelberg, told Yicai.

The EU’s move may not win much support from German businesses, but it will likely get support from countries such as France, because they will suffer less losses should China take countermeasures, said Daniel Frerichs, director of the Guangzhou Development Zone Offshore Innovation Center, who is visiting China at the moment.

“Global markets are now flooded with cheaper Chinese electric cars, and their price is kept artificially low by huge state subsidies,” European Commission President Ursula von der Leyen said in her annual State of the Union address on Sept. 13. “We are launching an anti-subsidy investigation into electric vehicles coming from China.”

Europe needs to realize that Chinese automakers and suppliers in the industrial chain are not selling out-of-date products, Frerichs said. What they are selling are highly-competitive products based on independently developed innovative technologies. Some of these technologies have set international standards, such as those in the battery field.

People who work closely with China’s automotive industry know that this is the case, but those who do now know about China’s industrial growth and its capabilities in mass production will find it a surprise, he added.

Many of China’s NEV startups have tie-ups with German suppliers, such as Bosch and Schaeffler Group, Frerichs said. There are very close collaborations in the upstream and downstream segments of the electric vehicle sector and everyone involved knows this, he added.

Frerichs asked battery makers from France and other European nations if they produce their batteries independently and he said they said they purchase raw materials and parts from China.

Internally, the European car industry has reached a consensus in terms of using China-made batteries and technologies, Frerichs said.

Politicians do not understand that in the field of EVs, China is not selling cheap and plastic items, but very high-tech products, Frerichs said. Politicians should try out Chinese electric cars themselves before they decide to launch an anti-subsidy investigation.

It is important for Chinese new energy firms to continue to invest in Germany, Frerich said. This is because Europe does not have sufficient capability to produce locally. It will also help achieve green goals, and this will eventually benefit the whole of Europe.

Germany’s imports of vehicles and auto parts from China surged 75 percent in the first half from the same period last year, according to a recent report published by the German Economic Institute. Some of these EVs are German marques that are made in China, such as BMW’s iX3.

Although eight Chinese auto brands have entered the German market, they only account for around 1.5 percent of Germany’s total car sales, the report said.

Editors: Tang Shihua, Kim Taylor