The EU has launched a probe into the state subsidies that could have allowed China to flood the European market with cheap EVs. The investigation was announced by the commission president Ursula von der Leyen during her State of the Union address to parliament on Wednesday 13 September.

“Global markets are now flooded with cheaper electric cars,” von der Leyen said. “And their price is kept artificially low by huge state subsidies. This is distorting our market.”

The next day, the Asian giant attacked the move, calling it an act of “naked protectionism” and vowing to protect the “legitimate rights” of Chinese automotive companies. 

“It is a naked protectionist act that will seriously disrupt and distort the global automotive industry supply chain, including in the EU, and it will have a negative impact on China-EU economic and trade relations,” the Chinese commerce ministry said in a statement.

“China will pay close attention to the protectionist tendency...