Tesla (NASDAQ:TSLA) shares slipped on news that the European Union will reportedly probe the electric car maker over its China exports.
During the evidence-gathering that precipitated this month’s surprise announcement of an EU anti-subsidy probe into Chinese EVs, the US carmaker was among the companies found to have likely benefited, according to people familiar with the matter.
The aim of the investigation will be to determine whether, and the degree to which, China has subsidized Tesla and domestic manufacturers including BYD Co., SAIC Motor Corp. and Nio Inc., and to take any necessary countervailing measures to level the playing field for the EU’s industry, said the people, who asked not to be identified discussing private deliberations.
The probe that European Commission President Ursula von der Leyen made public on Sept. 13 has the potential to reshape the competitive dynamics within the world’s second-largest EV market, after China. Both sides have ample reason to proceed carefully: While the EU risks exposing its manufacturers to potential retaliation, the bloc is the most attractive export destination for Chinese companies rife with excess production capacity.
Tesla started exporting Model 3 sedans built at its Shanghai factory in late 2020, less than a year after starting production at its first overseas car plant. By July 2021, the company referred to the facility as its primary vehicle export hub.
TSLA shares demurred $1.97 to $245.02.
