BYD received $3.7 billion in Chinese help to dominate EVs, report reveals.

A new analysis found that Beijing gave BYD Co. at least €3.4 billion ($3.7 billion) in direct government subsidies to dominate electric automobiles and other sustainable technology.  

Aid for China's top EV maker increased from €220 million in 2020 to €2.1 billion in 2021, according to Germany's Kiel Institute for the World Economy. As the EU probes potential unfair help for China's EV sector, BYD also benefits from local battery manufacturer support and auto rebates, according to the report.  

Subsidies like those given to BYD “have allowed Chinese firms to scale up rapidly, to dominate the Chinese market, and to facilitate increasing expansion into EU markets,” claimed the German government-advising institute.  

France and others are calling for the EU to rebalance trade with China due to a glut of Chinese-made goods flooding the market. After thriving in China, BYD, Nio, and Geely are expanding in Europe. Tesla and Volkswagen are losing market share in a fierce EV price battle.  

In 2022, most of China's listed firms received direct giveaways, weakening wind, solar, and railway rolling stock industries, the Kiel Institute reported. The group said Chinese industry subsidy is “at least three to four” times more than in large EU and OECD countries.  

The EU has a €40 billion innovation fund to compete with China and U.S. Inflation Reduction Act subsidies. In October, the European Commission investigated whether Chinese aid for BYD, SAIC, and Geely gave the country's sector an unfair edge. Tariffs could begin in July.  

China calls the subsidy probe protectionist and claims its carmakers are winning the EV race with better goods. Chinese Minister of Commerce Wang Wentao stated Sunday in Paris that Chinese EV manufacturers rely on “continuous technological innovation” and advanced local supply networks, not the government.  

One of the report's co-authors, Dirk Dohse, called German Chancellor Olaf Scholz's travel to China next week a “excellent opportunity,” to negotiate subsidies with Beijing. BYD originated as a battery company but spent heavily in EV and plug-in hybrid development. It expanded when China's vehicle market boomed due to large EV subsidies  

The company, which earned 30 billion yuan ($4.2 billion) in 2023, has undercut Western manufacturers in China on pricing. The Seagull hatchback with a 10-inch rotating touchscreen costs about $10,000.  

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