Chinese leading electric car manufacturer BYD received direct state subsidies of approximately EUR 220 million in 2020, rising to EUR 2.1 billion in 2022. In terms of business revenues, direct subsidies increased from 1.1 percent in 2020 to 3.5 percent in 2022. This is the result of an investigaton by Germany’s Kiel Institute For The World Economy.
Additionally, BYD receives significantly more purchase premiums for electric cars in China compared to other domestic manufacturers like GAC or foreign companies producing locally, such as Tesla or VW’s joint ventures, the study says.
However, the figures clearly understate the true scale and scope of green technology subsidies in China, ss BYD also benefits from subsidies to battery producers through lower input prices, as well as subsidies to buyers of battery electric vehicles, thus stimulating demand.
China’s massive state subsidies are not limited to EV cars. According to a very conservative estimate, industrial subsidies in China amounted to around EUR 221 billion or 1.73% of Chinese GDP in 2019.
The authors urge the European Union to engage in negotiations with the Beijing government amidst the recently initiated anti-subsidy proceeding against imports of electric vehicles from China, aiming to persuade China to withdraw subsidies particularly harmful to the EU. Given China’s current macroeconomic weakness, its relative strength in green technology sectors, and its tensions with the US, the authors see a realistic chance of successful negotiations.
Next week, German chancellor is visiting China, accompanied by an induszry delegation.
What is sad is the US also funnels billions into the auto industry but we don’t even get affordable prices for our investment, let alone prices that would crush foreign competition.
US companies probably use those subsidies to raise executive pay & bonuses
Every country subsidizes their own auto industry. Every single one of them.
What a major embarassment for EU. China benefitting the climate by getting fossil fuels off the roads. And EU throwing a tantrum to try and stop them.
There are some comments like this, suggesting that the commentators didn’t even click the link.
China is investing government money into electric car companies so they can produce more of them for cheaper. this gives them a competitive edge against electric car companies in EU that arent being bolstered by government subsidies. The EU has two options: one, the environmental option, they compete by subsidizing their own car companies to produce electric vehicles, which would accelerate the effort to stop relying on fossil fuels and reduce emissions by having two regional markets focused on vehicle electrification. Or two, the capitalism option, they compete by pressuring China to drop their subsidies, which would slow down efforts to stop relying on fossil fuels as neither regional market is focused on vehicle electrification.
from your article, “The authors urge the European Union to engage in negotiations with the Beijing government amidst the recently initiated anti-subsidy proceeding against imports of electric vehicles from China, aiming to persuade China to withdraw subsidies particularly harmful to the EU.”
ensuring we stay on track for the absolute worst timeline for humanity.
@blazera@lemmy.world
China is investing government money into electric car companies so that they can produce more if them cheaper …
Your positive framing of China’s economic policy is completley out of touch. It really helps to read more than a few lines of a post. The negative consequences of Chinese subsidies are obvious in tbe country’s domestic market, and there’s no reason to copy that for the world.
China’s EV price war is killing brands and infuriating consumers
China’s EV market has slowed down as consumers cut spending in a post-pandemic economy.
Brands are fighting a fierce price war in a crowded industry, leading to fast depreciation of electric cars.
Some startups are on the brink of collapse, leaving software maintenance in limbo.
And this is just one example. Read the study, find more research, tere is a lot.of it.
So isn’t this similar to the US Chips act… Funnel billions into an industry that the country sees as nationally important.
Doesn’t the EU do this with its farm subsidies? Ensuring Europe can feed itself if it needs to…
i don’t love china but “we must stop them from checks notes subsidizing green energy” is bizarre
China is trying to build hegemonial economic power, with Chinese products being an integral component of every future supply chain. Green technologies are an excellent vehicle for that, because they’re fairly future-proof and will see extreme growth.
But sure, the EU needs an equivalent to the US’s IRA if it wants to have any industry or political/economic independence going forward.
I’m sorry, I’m afraid that has already happened?
What exactly is being manufactured outside China? How many items in your household are not from China?
China owns a lot of manufacturing capacity for basically everything already, correct. However, in most of these industries there are alternative supply chains, often a bit more expensive and a lot lower-capacity. But if in the future, China is the only country that can produce certain goods at all because e.g. they have the only scientists who know their way around a certain technology, then that’s a different situation still.
(Also, quite a few things here are not made in China, including recent buys. That list excludes most electronics though, I give you that.)
