The European Commission has formally launched an investigation into China's state subsidies for manufacturers of electric vehicles, which it suspects keep down prices of the vehicles sold in the European Union.

The commission on Wednesday officially announced the launch of an anti-subsidy investigation into electric vehicles imported from China to determine whether the practice is harming European markets.

The commission says that should it find evidence that China's actions are causing market distortion and unfair competition in the bloc, it could impose tariffs on Chinese EV imports.

The commission says the probe will be carried out in line with EU and World Trade Organization rules, and that it will seek responses from the Chinese government and the companies concerned.

China's commerce ministry released a statement, saying China is very dissatisfied with the investigation, which it says lacks adequate evidence.

Some EU members are wary of a possible trade war with China.

Germany's minister for economic affairs and climate action, Robert Habeck, warned last month that German carmakers are afraid China could retaliate if the EU were to slap duties on Chinese electric vehicles as a result of the probe.