> China’s aid to domestic new energy vehicles amounted to roughly $5.6 billion until 2022 when the direct payments to manufacturers were phased out.
$5.6 billion in subsidies over 10+ years. Ford has $29bil cash on hand Q3 2024. GM has $32bil cash on hand Q3 2024. Tesla has $33bil cash on hand Q3 2024.
This is all public data (legally required for all publicly traded companies) anyone can check.
American car companies don't need subsidies. They need to be less incompetent about spending their money, and whine less begging for USA government subsidies.
If you believe the USA should send more money to their car companies, you're a sucker who fell for propaganda from car companies who are asking for handouts to increase their profit margin.
Besides, reducing all of these achievements in EV technology to mere "subsidies" is being willfully blind. CEOs of incumbent car makers have been communicating for some time now how competitors such as BYD have a real technological edge thanks to research, innovation and having painstakingly built large, comprehensive and efficient supply chains. Subsidies are somewhat involved but not that much, especially considering that (1) subsidies are declining, (2) EU and US also subsidize. Have people ever looked at EV tax breaks in the Netherlands, or more in general tax breaks for any sort of R&D work (WBSO)? Nobody ever complained about that.
Cars such as by BYD are already profitable even without subsidies. That's why subsidies are declining.
One really has to ask oneself: if we subsidize incumbent automakers, are they really going to achieve the same level of competitiveness and innovation? Or will they just use it to launder more profits for shareholders? Be honest.
I think we should stop pretending that Chinese EV/battery companies can compete on their own without Papa Xi's big wallet or baton to keep out foreign competition.
What does that even mean? Direct EV subsidies are already gone. In the first place, they were meant to start up an industry, not to be sustained forever.
On a higher level, I find your thinking weird. Nobody ever said "let's not pretend $HIGH_SCHOOL_STUDENT can compete on its own without papa's wallet". Everybody thinks that it's natural to invest in a child's education until they can compete on their own in the world.
College enrollment rates have only recently reached a high level.
You’re delusional, Chinese car factories are way more automated and advanced than our own, and they’re just seeing the benefits pay off. I think we should stop assuming that Asians can’t produce quality work.
asians? - definitely make great stuff. chinese specifically? - they will have to prove that they can in fact make good quality products. I have bought hundreds of chinese products over the years and last thing I would subject myself to (and especially my wife and daughter) is chinese vehicle… they have a steep hill to climb to convince us that have bought many chinese-made goods that they can make good quality products
It's not just mere "subsidies," there is also blatant protectionism. CEOs of incumbents car makers have been warning against the Chinese gov't unsavory anti-market practices to protect their local battery companies and achieve market dominance past 10 years, such as:
1. Power Play: How China-Owned Volvo Avoids Beijing’s Battery Rules Car maker is allowed to use high-end foreign technology, while rivals are squeezed into buying local, Trefor Moss, May 17, 2018, the Wall Street Journal
... China requires auto makers to use batteries from one of its approved suppliers if they want to be cleared to mass-produce electric cars and plug-in hybrids and to qualify for subsidies. These suppliers are all Chinese, so such global leaders as South Korea’s LG Chem Ltd and Japan’s Panasonic Corp. are excluded.
... Foreign batteries aren’t officially banned in China, but auto executives say that since 2016 they have been warned by government officials that they must use Chinese batteries in their China-built cars, or face repercussions. That has forced them to spend millions of dollars to redesign cars to work with inferior Chinese batteries, they say.
... “We want to comply, and we have to comply,” said one executive with a foreign car maker. “There’s no other option.”
2. Why a Chinese Company Dominates Electric Car Batteries, Beijing gave CATL lavish subsidies, a captive market of buyers and soft regulatory treatment, helping it to control a crucial technology of the future. Keith Bradsher and Michael Forsythe, Dec. 22, 2021, The NYTimes
3. The Key to Electric Cars Is Batteries. One Chinese Firm Dominates the Industry. Beijing built the world’s largest EV market, then pressured foreign car makers to use its batteries, Trefor Moss, Nov. 3, 2019, WSJ
... China is by far the biggest EV market, and to boost its standing in the fast-growing industry, China began pressuring foreign auto makers to use locally-made batteries
... Auto makers weren’t pleased, but they fell in line. During a visit to CATL headquarters in 2017, three Daimler AG executives displayed their irritation shortly after the meeting started, recalled Jiang Lingfeng, then a CATL project manager who prepared a technical briefing for the visitors. One Daimler executive cut off his briefing, said Mr. Jiang. “We’re not interested,” the executive said, according to Mr. Jiang. “The only reason we’re here is that we have no choice, so let’s just talk about the price.”
... Still, auto makers bridled at CATL’s dominance, according to Mr. Tsao, the former supply-chain manager there. CATL’s batteries also cost 25% more than those of leading rivals because the company was still learning to mass-produce cost-effectively, he said. “The price is high, and the service is slow,” he said, summing up CATL’s proposition to auto maker clients.
... “What the government did was a good thing for China,” said Mr. Jiang, the former CATL project manager. “Without its restrictions, I don’t think CATL would ever have been successful.”
Let's not forget that the EU also followed up with a WTO complaint against China for their NEV regulation that forced tech transfer (see WT/DS549) in 2018, and waited over 6 years to take a countervailing measure (2024/1866) against prohibited subsidies practices.
ironic comment, considering that the Chinese gov't fossile fuel subsidies's is by far the largest in the world -- or $270+B vs. $3B US (see the IMF's 2023 Fossile Fuel Subsidies Report).
All that to support cheap energy and overcapacity.
