Tesla could be part of the European Union's probe into China subsidies
Xiaolu Chu/Getty Images News
Tesla (NASDAQ:TSLA) fell in early on trading on Tuesday after reports indicated that the automaker could be part of the European Union probe into whether China's electric vehicles industry is receiving unfair subsidies. Early evidence gathered by the EU suggested that the U.S. automaker is one of the companies benefitting from China's support of the EV industry.
European Union executive vice-president Valdis Dombrovskis told the Financial Times on Tuesday that there was "sufficient prima facie evidence" to justify a probe into imports from China of electric vehicles. "Strictly speaking, itâs not limited only to Chinese brand electrical vehicles, it can be also other producersâ vehicles if they are receiving production-side subsidies," stated Dombrovskis in regard to a question on whether Tesla (TSLA) might be an auto brand that could fall under the probe for the cars it delivers to Europe from its Shanghai plant. Other EU official have made similar comments earlier in the year about the need to investigate imports. Close to one-fifth of all electric vehicles sold in Europe are manufactured in China.
Chinese electric car companies Nio (NIO), XPeng (XPEV), and BYD Company (OTCPK:BYDDF) have grown imports to China this year, but still account for a relatively small part of the market.
Shares of Tesla (TSLA) fell 1.31% in premarket trading to $243.75. The EV stock still trades comfortably ahead of its 100-day and 200-day moving averages. NIO (NIO) fell 1.80% in the early session and XPeng (XPEV) shed 2.70%.

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