Tag Archive: china

  1. LEVA-EU calls for evidence of damage to EU e-bike companies by dumping measures

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    The Commission has announced the expiry of the measures against electric bicycles from China in the Official Journal. LEVA-EU is anticipating a review and potential renewal of the measures. In the meantime, the Kafkaesque legislation and the multiple actions by national customs services and OLAF, cause unacceptable disruption and damage to many European companies. Ahead of the review, LEVA-EU calls on all companies affected by the measures for evidence.

    In the EU Official Journal of 2 May, the European Commission has published a notice of the impending expiry of the anti-dumping and countervailing measures against electric bicycles from China. This notice only results from normal procedural rules. The deadline for the current measures is 19 January 2024. Article 11.2 of the basic Dumping Regulation stipulates: “A definitive anti-dumping measure shall expire five years from its imposition (…), unless it is determined in a review that the expiry would be likely to lead to a continuation or recurrence of dumping and injury. Such an expiry review shall be initiated on the initiative of the Commission, or upon a request made by or on behalf of Union producers, and the measure shall remain in force pending the outcome of that review.”

    It seems a foregone conclusion that EBMA will request a review. However, the main question is what arguments the organisation will use to extend the measures for another five years.

    In the past 4.5 years, EBMA has developed a surging discours on bringing industry back to Europe and especially on the large number of jobs that will come with it. The whole campaign culminated in a European Parliament Motion for a resolution on developing an EU cycling strategy which, very triumphantly announced that “the EU cycling ecosystem can scale up to 2 million jobs by 2030”.

    Much, of course, depends on the definition of the ‘EU cycling ecosystem”, but the fact is that we are still very far from those targeted two million jobs. In a report on employment in the (e)bike business, CONEBI concluded that there were 155,00 jobs in 2021. Incidentally, it appears that the violins in the (e)bike business are not quite tuned in unison. In their 2022 market report, the German (e)bike industry association stated: “The ZIV anticipate no large-scale relocation of production (reshoring) to Europe at the current time. However, it does expect production in The EU to grow in importance.”

    And, contrary to what EBMA might claim, the anti-dumping measures are all but helpful to achieve the objective of 2 million jobs, since they are a major obstacle in starting up new companies, whilst causing extensive damage to existing companies in the European Union.

    EBMA shouts so loudly that the measures are absolutely necessary for “reshoring for better sustainability, more EU green jobs and EU investments/innovation”, that everyone, including the EU authorities seem to forget what dumping is really about. It is of course not about reshoring, green jobs nor about investments or innovation. The WTO defines dumping as “in general, a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product in the market of the exporting country.” Another important element of dumping is the injury it causes to the EU-industry. And here lies the crux of the matter: what is the European ebike industry? In the end, everyone does the same thing: buying parts and assembling them into electric bikes. The net result of the measures against China however is that one part of the European ebike “industry” proffers from the measures, while another part is getting severely injured.

    The anti-dumping measures on electric bicycles from China have nothing to do with “a situation of international price discrimination“. They prove to be a huge barrier for those European companies that have had to find an alternative to assembly in China and equally for all those trying to start a new e-bike business in Europe since the introduction of the measures.

    As for assembly in Europe, anti-dumping measures have become completely intertwined with the extension of anti-dumping measures on bicycle parts from China. Furthermore, the Commission has created a highly discriminatory legal distinction between companies that assemble both conventional and electric bicycles and those that assemble electric bikes only. Furthermore, the Commission has recently made it quite a bit more difficult to obtain an exemption for assembly of conventional and electric bicycles. The entire legislation is so complex that no manufacturer can be assumed to understand the rules on their own. Start-ups are forced to pay anti-dumping duties on electric bike components for quite a while, before obtaining the necessary authorization to be released from duties on components. Who can afford this?

    However, after having paid duties on e-bike components, which according to Sabine Weyand, Director General of DG Trade are not subject to anti-dumping duties, they are then subject to extensive financial guarantees.  In addition, shortly after introducing dumping duties on e-bikes from China, the European Commission also changed the rules of origin for imports of electric bikes from non-preferential origin countries overnight.

    In the meantime, both national customs authorities and OLAF are constantly investigating companies, electric bike imports and assembling facilities in and outside Europe. The companies involved usually have no idea what they are suspected/accused of, nor are they given any information about the progress of the case. Some, meanwhile, have been waiting for news for three years and live with the threat of fines that may push them into bankruptcy, sometimes even imprisonment!

    LEVA-EU has been working relentlessly to explain all legislation pertaining to this e-bike case. In meetings with the European Commission, we have explained the many aberrations an discrimination in the rules, the net result of which being that it’s virtually impossible to start-up a new e-bike business in Europe, while many existing businesses are under threat due to unfair rules. Ahead of the review, we will continue to do so. To this end, we want to draw up an inventory of as many cases as possible of European companies that are being investigated by customs and/or OLAF.

    So, are you or have you been investigated by customs and/or OLAF and are you or have you been accused of for instance:

    • Buying from a European supplier who is suspected of circumventing anti-dumping duties on electric bicycles from China
    • Not paying anti-dumping duties on bike components for e-bike assembly
    • Using incorrect HS codes to avoid anti-circumvention duties on bicycle components
    • Assembling in the EU or buying from an assembler without an exemption or end-use authorization
    • Illegal application of rules of origin for e-bikes that are produced outside the EU and China

    We kindly request you to report your problems to LEVA-EU. We guarantee absolute confidentiality. Cases may be reported to LEVA-EU Manager Annick Roetynck by phone, +32 475 500 588 or by mail, annick@leva-eu.com. Alternatively, you can also book an appointment at the forthcoming Eurobike, here: https://calendly.com/annick_leva-eu/eurobike-meeting

    Photo by John Simmons on Unsplash

  2. Greenway completes move into new Taizhou HQ

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    The LEVA-EU member, who produces battery packs for use in LEV projects, has moved into a new state-of-the-art headquarters.

    The new property, based in Taizhou, China, has a footprint of 23,000 square meters, with a total construction area of 100,000 square meters and a workshop area of approximately 64,000 square meters. Alongside existing key staff, the HQ will contain Greenways’ new R&D and Innovation centre, ensuring the company’s lithium-ion battery products are of the highest quality.

  3. Johnson Electric acquires a majority stake in Pendix GmbH, provider of electric drives and e-bikes

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    Source: Johnson Electric

    Johnson Electric announces the acquisition of an 80% stake in LEVA-EU member Pendix GmbH, a well-established technology-driven market player in the e-bike industry. Based in Zwickau, Germany, Pendix designs, manufactures, and brings complete electric cargo bikes and electric drives for bicycles to market. Pendix’s offering combines leading innovation with an extremely high level of product reliability.

    “By welcoming Pendix as part of Johnson Electric Group, we are expanding our e-mobility offering and entering the e-bike market. With Johnson Electric’s industrial scale and global reach together with Pendix’s expertise in the e-bike sector, we are positioning ourselves into a fast-growing and innovative industry,” said Dr. Patrick Wang, Chairman and CEO of Johnson Electric.

    “Our engineering center in Dresden, Germany, is in close proximity to Zwickau. This will enable close collaboration with the highly skilled Pendix team. We’re excited about expanding into the e-bike sector, and by doing so we hope to create a more sustainable future for personal mobility,” added Austin Wang, Senior Vice President of Johnson Electric.

    All Pendix founders, who started the company in 2013, will remain shareholders of Pendix and continue in their active management roles to lead the business growth plans.

    “We are extremely pleased to join such a reputable company as Johnson Electric and are convinced that our common passions for innovation and engineering perfection together with a strong cultural fit are a great foundation for reaching the next level of success,” commented Thomas Herzog, co-founder and CEO of Pendix GmbH.

  4. EU Court annuls anti-dumping & anti-subsidy Regulations for Giant

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    End of April, the EU General Court has ruled that the anti-dumping and anti-subsidy Regulations on imports of electric bicycles from China must be annulled in so far as it concerns the applicant, i.e. Giant.

    The judgment is clear and simple. The Commission has made a methodological error in the determination of price undercutting which cannot be overcome. This error invalidates the causal link between the alleged dumped imports and the injury to the EU industry. As a result, the Court has annulled both the anti-dumping and anti-subsidy Regulations for Giant.

    More importantly, the Court has stated that the methodological error has a bearing on the calculation of price undercutting established in respect of the other sampled exporting producers. In other words, the Regulations are in theory not only invalid for Giant but for all parties involved. However, only Giant took the case to Court and, therefore, the Court can only rule for Giant.

    This judgment proves how shaky the Commission’s evidence in this case was. And because the evidence was so shaky, the Court had no trouble in overturning it.

    LEVA-EU is currently seeking legal advice on the wider implications of this judgment. The Anti-Dumping and Anti-Subsidy Regulations in question continue to have a very negative impact on European companies. Partly because of the intertwining with the anti-circumvention rules on bicycle parts, it is nearly impossible to start up a new e-bike business in the EU. At the same time, life is also continually made difficult for e-bike importers and assemblers outside Europe and China.

    The court has exposed part of the injustice. Hopefully, this verdict will lead to the elimination of all other trade barriers resulting from these two fundamentally flawed EU regulations.

  5. EPPO circumvention investigations

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    In February, the European Public Prosecutor’s Office (EPPO) has communicated on two cases of alleged circumvention of the anti-dumping duties on electric bicycles from China.

    One case is situated in Naples, where companies allegedly imported dissassembled e-bikes from China and declared them as e-bike parts and spare parts, instead of e-bikes. The companies are also accused of evading VAT by using Turkey as country of origin and Turkish shell companies.

    The second case is situated in Palermo, Sicily. A company there is accused of importing e-bikes from China and falsely declaring Malaysia as country of origin. This case was initiated following a report by the European Anti-Fraud Office (OLAF).

    Investigations into both cases are ongoing.

    If you have any questions on how to import components and e-bikes from outside the European Union or on how to import components, with a view to assembling in the EU, please contact LEVA-EU Manager, Annick Roetynck, annick@leva-eu.com. We have an exhaustive briefing with full details on how to avoid circumvention and how to work legally both in and outside the EU.

  6. China continues development of circular battery economy

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    Source: electrive

    Global electric vehicle usage continues to rise, and with it, potential battery waste. Changes to legislation in China provide a case study for other countries wishing to alter the life cycle of their batteries. 

    China is the world’s single largest early adopter of electric vehicles. Alongside this wave of new technology are new challenges, including an enormous quantity of batteries that must be reused or recycled. Over the last 6 months, China has seen a series of new directives that act to build upon existing battery reuse and recycling schemes, industry, and infrastructure.  The success of these initiatives over the coming months and years will provide crucial insight into how other countries can improve battery usage and secure a more environmentally conscious future for electric vehicles.

    During 2021, 3.3 million new energy vehicles (NEVs) were sold in China; these include purely battery, hybrid, plug-in hybrid, and hydrogen fuel cell vehicles. This number does not account for the millions of electric bikes and mopeds additionally sold during the period. The Ministry of Industry and Information Technology (MIIT) now aims to ensure greater environmental protection, improved resource utilization, and healthy NEV development through new directives. The battery recycling market in China is estimated to reach 3.59 billion euros by 2025.

    Battery reuse – a sustainable ladder

    After an operating period of 4-6 years, electric vehicle batteries operate at a capacity below 80%, becoming unfit for the original intended use. Here the second life ‘ladder’ utilized by China comes into action, moving batteries into slower electric vehicles, and eventually, stationary energy storage units. The policy is referred to as ‘most urgent use first’, with older batteries descending the ladder as their performance degrades.

    Battery recycling – the ins and outs

    At present, there are 47 whitelisted battery recycling companies in China, with two firms – Brunp and GEM representing 50% of official operation. Operating unofficially, a plethora of smaller businesses offering cheaper rates also exist, though may operate in a wasteful, or harmful way.

    However, while there is seemingly plenty of activity, only 30-40% of battery materials are estimated to be recycled. The relatively new industry is still finding its footing. In an ideal scenario, once all aspects are streamlined, there is a possibility for 80% of components in many battery types to be recycled.

    New directives to kickstart a recycling revolution (2018-2021)

    China’s first regulations in 2018 made automakers responsible for the recycling of batteries in their vehicles and promoted an ‘internet + recycling’ business model, facilitating the flow of second-life batteries.

    2021’s 5-year plan sees a renewed focus on the electric transport industry in all aspects and lays the foundation for a complete battery recycling system by 2025, representing a more circular battery economy. For region-specific initiatives and specific directives, click here.

  7. LEVA-EU launches Wechat account

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    On 17 February 2021, LEVA EU launches its official Chinese Wechat (the primary social media platform in China) account, with the goal of bridging the information gap and sharing LEVA EU updates with Chinese contacts.

    “We have been cooperating and working with our Chinese members and partners very actively from the start of our association“, LEVA EU Manager Annick Roetynck says, “but with the help of this Wechat account, we hope to bring our relationship and communication even closer. We know a lot of our European members also use this tool when working with their Chinese partners, and we hope they can share the channel with their Chinese network, who can surely benefit from the information we will publish.“

    LEVA EU China Affairs Director, Dennis Hu, explains “the Wechat account will share related information on a monthly basis, with a mission to create a closer and deeper connection between Chinese associates and members, and the European market.” He added the invitation, “Please do follow our account and we hope to interact with you all soon!“

    You may scan and follow LEVA EU’s Wechat account as below.

  8. How Chinese anti-dumping measures impact EU import of e-bikes

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    In 2019, Taiwan has taken the lead in the export of electric bicycles 25 km/h to the EU. Exports increased by 80% to almost 390,000. This was of course due to the imposition of anti-dumping duties on Chinese e-bikes. This forced companies assembling in China to move their operations. Some of them crossed the Formosa Strait to set up shop in Taiwan.

    Logically, the relocation of these e-bike assemblers accused of and punished for dumping should have resulted in Taiwan’s average export value being dragged down. Instead, it went up with 5.4% This further questions the very dubious Commission decision to penalize imports from China.

    In the meantime, efforts are continuing to make assembly of electric bicycles outside Europe more difficult. At the request of EBMA, in October last year, the European Commission has suddenly amended the rules of origin for countries with non-preferential status such as Taiwan: without prior warning and without a transition period. As a result, it is much more difficult to use Chinese parts in Taiwanese assembly. Thus, Europe tightens the thumbscrews on Taiwan without EBMA having to go through the difficult procedure of a circumvention complaint against the country.

    Apart from Taiwan (for the time being), very few non-EU countries seem to really benefit from the dumping. The growth percentages for Turkey, Malaysia, Indonesia and Cambodia, among others, are considerable, but the total export figures of these countries remain limited. In 2019, total export from non-EU countries declined 30% but increased in value by 38% from 602 to € 831. This value is very close to the average value of intra-EU imports for 2019: € ​​860. Total intra-EU imports increased by 47.4% to almost 2.3 million units.

    That indicates that much of the assembly was brought from China to Europe. And here too, the average value seriously questions the Chinese dumping measures. If dumping had actually been such that action had to be taken, the relocation of those assemblers would have led to a significant drop in intra-EU import values. Quod non. In 2019, it decreased only by 3.2% compared to 2018. Supporters of the dumping measures will no doubt point to the fact that a lot of assembly activities have been moved to the old continent. However, dumping measures have never been intended for relocation of production.

    Non-EU imports

    Country201720182019Change 2019/2018
    Taiwan126,130215,767388,875+80%
    Vietnam105,742152,803154,478+1.1%
    China718,011659,781105,370-84%
    Switzerland26,51637,25642,027+12.8%
    Thailand7,35811,45415,895+38.8%
    Turkey3122,45213,078+433%
    Malaysia82110,717n.a.
    United Kingdom5,2585,37810,418+93.7%
    Indonesia2554973,489+602%
    Cambodia01,8393,237+76%
    Total non-EU993,6631,091,610763,855-30%

    Average value of non-EU imports

    Country201720182019Change 2019/2018
    Taiwan99410001054+5.4%
    Vietnam562484558+15.3%
    China420443259-41.5%
    Switzerland157415941714+7.5%
    Thailand755629606-3.7%
    Turkey735720662-8%
    Malaysia846763206-73%
    United Kingdom352581438-24.6%
    Indonesia685551505-8.3%
    Cambodia06071129+86%
    Total non-EU543602831+38%

    Intra-EU imports

    Intra-EU1,037,8811,545,5662,278,379+47.4%

    Average value of EU-imports

    Intra-EU790880860-3.3%

  9. Commission Regulation 2020/1296 discriminates EU E-Bike Assemblers

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    On 29 September, we announced the publication of a new Regulation on essential bikes parts from China. LEVA-EU has now thoroughly analysed the text and concludes that the Regulation results in a serious discrimination of companies that only assemble electric bicycles. Below is a summary of this analysis. On 8 December, LEVA-EU has a meeting with DG Trade to discuss the problem. A story to be continued.

    • Since 1997, there is an extension of the anti-dumping duties on conventional bicycles from China by means of 48.5% anti-circumvention duties on essential bicycle parts.
    • European assemblers can obtain an exemption from this anti-circumvention duty. They must prove to the European Commission that the value of Chinese components does not exceed 59% of the value of the bike or the value added through assembly must be more than 25% of the manufacturing cost.
    • Once such exemption obtained, it is valid indefinitely and it does not require any additional compliance/reporting guarantees and obligations such as paying security deposits, etc.
    • Some essential bicycle parts are also used for the assembly of electric bicycles. They have been excluded from the 48.5% anti-circumvention duties by Regulation 512/2013. However, explicit exemption must be obtained by applying for end-use authorisation with national customs.
    • With the introduction of anti-dumping duties on electric bicycles from China, some companies have moved their assembly to Europe. In some cases, companies had an exemption for essential bicycle components for conventional bicycles, which they also used to import bicycle components for electric bicycles. However, there was uncertainty as to the legality of this procedure.
    • In an attempt to provide legal certainty, the European Commission has published Regulation 2020/1296. With that Regulation, the Commission certifies that companies in the EU, that assemble both conventional and electric bicycles, are allowed to use their exemption, originally awarded for assembly of conventional bicycles, for the duty free import of essential bicycle components for the assembly of electric bicycles.
    • This extension of the scope of the exemption appears to be automatic. In the Regulation, there is no procedure to report nor to assess whether companies effectively use essential bicycle components for the assembly of electric bicycles.
    • This Regulation does not grant companies, that assemble electric bicycles only, the same exemption for essential bicycle components imported for the assembly of electric bicycles. Instead, these companies must obtain exemption from 48.5% anti-circumvention duties through the end-use authorisation. This procedure is handled by national customs. There are numerous examples of companies trying to obtain this authorisation in vain. The administrative and financial burden resulting from this procedure is extremely heavy and complicated.
    • LEVA-EU has concluded that Commission Implementing Regulation 2020/1296 violates the principle of equal treatment and creates unfair conditions in the market of electric bicycles in the EU.  Therefore, LEVA-EU is of the opinion that the Commission makes either all producers of electric bicycles subject to an end use relief or to the Commission exemption system. 
    • If your company is assembling e-bikes only and has (had) difficulties in obtaining end-use authorization, please contact Annick Roetynck at LEVA-EU, tel. +32 9 233 60 05, email annick@leva-eu.com. We are collecting relevant testimonies.
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