Even as lawmakers speculate that significant tariffs on automobiles from the second-largest economy in the world may be imposed, Chinese electric carmakers are growing their presence in Europe.

This week, Nio inaugurated a store in Amsterdam, while last week, Xpeng introduced its G9 and G6 sports utility cars in France. In addition, Xpeng and BYD also displayed cars at the VivaTech convention in Paris.

The European Commission, the executive branch of the European Union, is now looking into subsidies provided to Chinese manufacturers of electric vehicles, which coincides with the public marketing campaigns. Tariffs on Chinese EV imports may follow from the findings of this investigation.

This action has previously been done by the US, as the Biden administration imposed 100% tariffs on the import of Chinese electric vehicles.

Chinese electric vehicle manufacturers have been actively entering foreign markets in an effort to both overtake more established automakers and compete with Elon Musk’s Tesla in those markets.

Businesses like as BYD have expressed worries over the competitive car price. The Seagull, a tiny all-electric hatchback from BYD, is priced at 69,800 yuan, or less than $10,000. The capacity of Chinese companies to produce low-cost automobiles might put pressure on established manufacturers, who might not be able to compete on price.

Because of the Chinese government’s encouragement and assistance, the EV business in China has flourished over the years, raising concerns among legislators in the U.S. and Europe.

French Finance Minister Bruno Le Maire declined to confirm that such measures are on the horizon when CNBC inquired about possible EU tariffs this week. However, he stated that his objectives are to “maintain level playing fields on the international stage and to safeguard our industry.”

However, not all EV manufacturers are happy with the taxes. Elon Musk of Tesla has stated that he opposes tariffs on Chinese electric cars.

During a Thursday Q&A session at the VivaTech conference, Musk responded to a question from CNBC’s Karen Tso by saying, “Neither Tesla nor I asked for these tariffs.”

He then on, “In fact, I was surprised when they were announced,” alluding to the import tax of 100% in the United States.

Musk had issued a warning earlier this year, saying that in the absence of trade obstacles, Chinese electric vehicle companies will “demolish” rivals outside.

(Adapted from CNBC.com)

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