China might have problems with its economy, but as an exporter of affordable electric vehicles, it’s on a tear. Now, investigators from the European Commission will visit Chinese EV makers as part of a probe into whether they have an unfair advantage thanks to government subsidies.
In the coming weeks, the EU investigators will visit BYD, Geely, and SAIC, according to Reuters. Their visits will help determine whether the EU imposes higher tariffs to protect European carmakers.
BYD recently overtook Elon Musk’s Tesla as the global leader in sales of electric vehicles. Backed by Warren Buffett’s Berkshire Hathaway, the carmaker keeps its costs low partly by owning the entire supply chain of its EV batteries, significant since a battery accounts for roughly 40% of an electric vehicle’s price.
But as the existence of the EU’s anti-subsidy investigation suggests, many worry there’s more than supply-chain efficiencies behind the low prices of Chinese EVs. The visits promise to be central to the EU probe, announced in September and set to run for 13 months.
So when BYD gets tax cuts and some subsidies to build factories it’s anti competitive
But when Tesla does the same then it’s fine?
Make it make sense.
Exactly. I don’t get why it’s a big deal unless there could be some situation where they’re avoiding getting tied to a contract that could see a huge price hike.
Here’s a fun fact: 85% of China’s government spending is by local governments (provincial and below). China’s federal support for EVs has been mostly limited to reducing taxes and fees on EV manufacturing (most notably, removing the consumption tax that is charged on automobiles).
If removing tax barriers is a government subsidy, I guess the EU claim has some water. Otherwise, the EU will be stuck whack-a-moling particular provinces for their economic incentives (and, of course, ignoring the billions that Tesla has received).
Grasping at straws. as if German automakers hadn’t received many subsidies and tax exemptions .
Europeans like to pay premium for the prestige of driving German made cars. now if those Chinese EV make it to Europe, they will bring havoc on premium’s cars market share especially in these very challenging times.
the carmaker keeps its costs low partly by owning the entire supply chain of its EV batteries, significant since a battery accounts for roughly 40% of an electric vehicle’s price.
And this impossible for other carmakers because… ?
The article doesn’t suggest it’s impossible. It’s difficult because you have to build up a competitive business from nothing in addition to the one you’re already building up.
