China’s electric vehicles have been flooding markets in Europe and the United States, benefiting from government subsidies and impacting local market competition. Over the past decade, Chinese electric vehicle giant BYD Company Limited (referred to as “BYD”) has received nearly 6.8 billion yuan in subsidies from the Chinese Communist Party (CCP) government, with various forms of subsidies making it a dominant player in international markets.
In the fourth quarter of 2023, BYD’s global sales surpassed Tesla for the first time, solidifying its position as a leader in the electric vehicle market. Global competition in the electric vehicle industry is becoming increasingly fierce.
According to BYD’s announcement in January of this year, the company sold 3.024 million vehicles in 2023, a 61.9% increase over the previous year, exceeding the set target of 3 million vehicles.
In 2021, BYD sold only 740,000 vehicles; in 2022, sales increased to 1.86 million vehicles, a 152.5% growth; in 2023, sales reached 3.024 million vehicles, a year-over-year increase of 61.9%.
CCP’s official media boasts that BYD’s exports exceeded 240,000 vehicles in 2023, a 334% year-on-year increase. BYD’s new energy vehicles are now available in over 70 countries and regions worldwide, with the brand’s high growth attributed to substantial subsidies from the Chinese government.
A report from “Leverage Game,” a financial and economic analysis public account under Caixin, highlighted BYD’s significant subsidies over the past decade, sparking discussions about the fairness of these subsidies in the industry.
The article systematically analyzed the subsidies BYD has received in recent years, revealing that between 2008 and 2022, the company received approximately 6.784 billion yuan in various subsidies related to R&D costs and manufacturing.
China has seen rapid development in the new energy vehicle sector in recent years, with the industry being identified as a key sector in the CCP’s 14th Five-Year Plan. By 2025, the penetration rate of new energy vehicles is expected to reach 20%, and by 2035, it is targeted to reach 50%.
A study by the Kiel Institute for the World Economy found that China’s subsidies for electric vehicles are 3 to 9 times higher compared to the United States and Germany, demonstrating substantial government support for BYD’s battery production and car manufacturing. This backing has positioned the brand as a major player in the global electric vehicle market, surpassing Tesla towards the end of 2023.
Recently, the Biden administration decided to impose 100% tariffs on electric vehicles from China, a move welcomed by American automakers who believe that these Chinese vehicles could undermine billions of dollars of investment in electric vehicles and battery factories in the US.
Democratic Senator Gary Peters of Michigan stated that imposing 100% tariffs on Chinese electric vehicles is a necessary response to China’s unfair trade practices, which pose a threat to the future of the American automotive industry.
According to data compiled by World Car, in 2023, China’s car production and sales reached new highs, exceeding 30 million units, with a growth rate of 11.6% and 12% compared to the previous year, respectively.
BYD’s vehicles are now sold in nearly 60 countries, particularly in Europe. The company became the first in the world to produce over 5 million hybrid and electric vehicles last year and also supplies batteries to leading manufacturers such as Tesla, BMW, Mercedes-Benz, and Audi. Chinese automakers are now aggressively entering Western markets on a large scale.
In April this year, Guan Yao, a member of the Dialogue China think tank, warned on Radio Free Asia that European and American countries should be wary of the negative effects of relying on Chinese products, particularly in the electric vehicle sector.
European Commission has initiated an anti-subsidy investigation, and if China’s state subsidies are found to distort the European market, punitive tariff measures could be implemented as early as July this year to ensure fair competition.
With the intense competition in the global electric vehicle market, BYD and Tesla have been engaging in a fierce battle to increase market share, leading to price wars and prompting other carmakers to follow suit in lowering prices.
During the recent May Day holiday, BYD once again slashed prices aggressively to gain market share. In addition to offering subsidies of up to 8,000 yuan for the Dynasty series models, Haiyangwang followed suit by providing a subsidy of up to 10,000 yuan. These promotional strategies have further enhanced BYD’s competitiveness in the market, solidifying its leading position in the new energy vehicle sector.