The battle between China and Europe over electric vehicles has just heated up

• China said it plans to sue the European Union after the bloc cracked down on its electronics giants.
• The EU imposed sweeping tariffs on Chinese electric vehicle companies, including BYD, last week.
• The measures have raised fears that China could retaliate by imposing its own tariffs on European automakers.

China is resisting Europe's crackdown on its electronic giants.

China's Commerce Ministry said on Monday it would file a complaint with the World Trade Organization (WTO) against the European Union's tariffs on Chinese electric car makers.

The EU voted in October to impose sweeping tariffs on Chinese electric vehicle companies such as BYD.

The new tariffs, finalized last week, impose a 17% levy on BYD, while other automakers face tariffs of up to 35.3% on top of an existing 10% tax.

A translated statement from China's Ministry of Commerce announcing the lawsuit said the tariffs lacked a “factual and legal basis” and violated WTO rules.

The Chinese government had previously requested consultation with the international body about the subsidies in August. A WTO official confirmed to Business Insider that the organization had received a request from China for consultations with the EU on its import tariffs.

A European Commission spokesman told BI that the EU governing body was confident that its anti-subsidy investigation was compatible with WTO rules.

“We are very confident that our investigation and final measures are consistent with the WTO.

“Against this background, the Commission takes note of China's request for WTO consultations. We will examine all details and respond to the Chinese authorities in due course,” the spokesman said.

The EU's tariffs have raised fears that China, which has already launched investigations into European brandy and cheese, could retaliate by imposing its own trade barriers on European carmakers operating in the country.

China is a huge market for German automakers such as Volkswagen, BMW and Mercedes, but they are increasingly struggling in the country with an onslaught of local competitors that have taken market share from European automakers thanks to their offering of cheap, high-tech electric vehicles.

Some Chinese players are now expanding into Europe despite European Union tariffs.

BYD is planning factories in Hungary and Turkey, while Tesla rivals Xpeng and Leapmotor have also expanded into new European markets in recent months.