China's NEVs must prepare for 'a hard fight', expert says

China's electric vehicle sector---and its manufacturing industry in general---must prepare for "a hard fight" against possible containment in the fields of technologies and upstream minerals and resources, a prominent trade expert said.

Zhang Yansheng, chief researcher at the China Center for International Economic Exchanges, made the remarks as European Commission President Ursula von der Leyen took swipes at China, including announcing the launch of an anti-subsidy probe into Chinese electric vehicles, in her latest State of the Union address on Wednesday.

He stressed that EU's so-called investigations, and levies if they become true, are purely actions out of trade protectionism and are groundless.

"That will be like open moves to isolate the EU market from high-quality and price-competitive Chinese EVs. It will only motivate China to forge stronger domestic manufacturing industry against all odds," he said.

Zhang further predicted that the probe may be merely a start following a series of containment moves by the EU and the United States to hurt the development of Chinese EVs.

The Western countries have been developing solid-state battery and other technologies to outperform China's current leading position in the EV industry, and their influence over key mineral resources supplies such as lithium and cobalt may also be a handy tool for them, he said.

However, if the EU takes the move to impose more tariffs on Chinese EVs, the expert suggested China should not take immediate countermeasures such as imposing extra duties on EU imports.

"If the EU acts out of protectionism and selfishness, that doesn't mean we should take similar actions with tit-for-tat tariffs," Zhang said.

"That may lead to a new trade war, disrupting global market order and undermining development conditions for Chinese enterprises," he said.

According to him, Chinese manufacturers need at least 10 years to shift their competitiveness from price advantages to lead in technologies and standards formulation. Such transformation is especially crucial in view of the reposition of US and EU trade policies on China, which include competing and suppressing Chinese manufacturing industry in fronts of technologies and standards, he added.

"Just as what has happened to the photovoltaic industry, under such external protectionist pressure, China's EV industry will likely grow stronger and thrive with products that have higher competitiveness and are irreplaceable," Zhang added.

Europe and Southeast Asia are two major destinations of Chinese NEV makers' increasing exports, according to the China Association of Automobile Manufacturers.

A total of 727,000 NEVs were shipped overseas from China from January to August, up 110 percent year-on-year, according to the association.

Among them, pure electric vehicles totaled 665,000 units, and plug-in hybrids stood at 62,000 units, the association said.

China's auto exports totaled 2.94 million units in the first eight months, up 61.9 percent year-on-year, according to the CAAM.