EU trade chief hints at tech transfer requirement for Chinese EV firms

The European Union’s top trade official, Maroš Šefčovič, has suggested that Chinese electric vehicle (EV) manufacturers seeking to invest in Europe may be required to transfer technology as part of their operations.

His remarks come ahead of his visit to Beijing next week, as the EU grapples with concerns over China’s rapidly expanding EV production and its potential impact on European automakers.

“If Chinese EV companies want to establish production in Europe, we must ensure fair and reciprocal conditions for our industries,” Šefčovič said during a press briefing. He indicated that technology-sharing agreements could be one mechanism to prevent market imbalances and support European manufacturers in competing with an influx of lower-cost Chinese vehicles.

China has emerged as the world’s largest EV producer, accounting for nearly 60% of global electric vehicle production in 2024, according to the International Energy Agency (IEA). The country exported a record 1.2 million EVs to Europe last year, a 70% increase from 2023, as companies like BYD, Nio, and XPeng aggressively expanded their footprint in the European market.

European automakers have warned that these imports - many of which benefit from substantial Chinese government subsidies- could undermine local production and cost thousands of jobs. The European Commission launched an anti-subsidy probe into Chinese EV imports in October 2023, with preliminary findings expected later this year.

“If the current trend continues, Chinese EVs could make up over 25% of the European market by 2030,” said a report from the Brussels-based think tank Bruegel. The report also noted that European EV manufacturers currently face 30-40% higher production costs compared to their Chinese counterparts.

China has strongly opposed protectionist measures in the EV sector, warning that restrictions on investment or forced technology transfers could escalate trade tensions. Beijing has previously criticized the EU’s anti-subsidy probe, arguing that Europe should not block market access for competitively priced vehicles.

As Šefčovič prepares for high-level trade talks in Beijing next week, analysts predict that China will resist any policy that mandates technology sharing. “China has historically opposed such requirements from Western companies operating in its market, so it is unlikely to accept similar conditions in Europe,” said Alicia García-Herrero, chief economist at Natixis.

The European Commission is expected to outline its stance on Chinese EV investments later this year, with potential policy actions ranging from stricter tariffs to investment screening measures. Meanwhile, European automakers are pushing for increased subsidies and policy support to help them remain competitive.

With Chinese EVs already making up 8% of new car sales in Europe in 2024, the outcome of Šefčovič’s discussions in Beijing could shape the future of the European auto industry for years to come.

Copied