European policymakers warned a few months ago that the continent was being flooded with cheap Chinese electric vehicles . They accused Beijing of backing major production overcapacity to allow China's automakers to grow their share of the global EV market.

The European Commission, the EU's executive arm, launched an anti-subsidy probe into the oversupply issue late last year and warned China's EV makers that they could face a new import tariff to offset what Brussels said was unfair competition for European carmakers.

The United States is due to levy a 100% import tax on Chinese-made electric cars, up from the current 25%, which will effectively keep Chinese automakers out of the US market. The EU currently levies a 10% tariff.

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But if the threat from Chinese automakers is so large, why did Great Wall Motor, China's seventh largest car manufacturer, announce last week it was closing its European headquarters in Munich, southern Germany, due to disappointing sales?

The decision sparked speculation about China's ability to compete in the European automotive market and whether the canceled plans were part of Beijing's retaliation against possible EU tariffs or purely for economic reasons.

"Although there is lots of noise around the arrival of Chinese car brands in Europe, they are still something of a rarity — evidenced by the slow uptick in registrations........

© Deutsche Welle