China’s EV makers got about $313 billion in aid over last 15 years
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A made-in-China electric car on display at a shopping centre in Beijing on June 13. New research findings say that Chinese EVs have benefited from massive industrial policy support and their quality is improving.
PHOTO: EPA-EFE
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WASHINGTON - China’s electric vehicle (EV) industry received at least US$231 billion (S$312.9 billion) in government subsidies and aid from 2009 to the end of 2023, even as the amount of support per vehicle has declined, according to new research.
Slightly more than half the total amount of support was in the form of sales tax exemptions, according to the research from Dr Scott Kennedy, a China specialist at Washington’s Centre for Strategic and International Studies think-tank.
The rest is made up of nationally approved buyer rebates, government funding for infrastructure like charging stations, government procurement of EVs, and research and development support programmes, he wrote in a blog post.
The findings come just after the European Union announced it will hike tariffs to as high as 48 per cent on vehicles imported from China to compensate for subsidies. That followed the decision by the United States to quadruple tariffs on the cars, while Canada is now preparing potential new tariffs
“Chinese EVs have benefited from massive industrial policy support and their quality is improving, making them attractive to domestic and overseas consumers,” Mr Kennedy wrote. “An effective response by the US, Europe and others must take account of both facts.”
He described the data as “highly conservative”, adding that it does not include local-level rebate programmes in cities like Shanghai and Shenzhen designed to encourage owners of conventional cars to switch to EVs.
It also does not include low-cost land, electricity and credit that some EV manufacturers can access and benefit from, and it excludes support for battery companies and other parts of the supply chain.
On a per vehicle basis, support has fallen from US$13,860 in 2018 to just under US$4,600 in 2023. This is less than the US$7,500 credit available to US buyers, unless they buy EVs using materials from China.
According to the post, China’s sales tax exemptions were worth almost US$40 billion in 2023, with this jumping from under US$10 billion in 2020 due to the rapid increase in sales of EVs.
“If Chinese EVs were pieces of junk, then they would not be a serious challenge to the rest of the world’s automakers,” Mr Kennedy wrote. “In general, Western automakers and governments have dilly-dallied and not been aggressive enough.” BLOOMBERG
