During the past ten years, the government of China shelled out nearly a quarter of a trillion dollars to bolster the Chinese EV industry, a sustained initiative that shows “Western automakers and governments have dilly dallied and not been aggressive enough” according to Center for Strategic and International Studies chair Scott Kennedy.
The minimum of $230.8 billion spent by China to sustain its in-country electric vehicle automakers accounts for 18.8 percent of 2009 through 2023 EV sales, CNBC reports.
More recently, the amount of government support relative to organic sales has fallen sharply, from 40 percent at the start of the EV push to approximately 11 percent last year. However, the government of China continues to offer robust financial backing to its EV industry. Additionally, the state provides non-monetary support in other areas, helping to give Chinese electric vehicle companies a leg up on foreign rivals.
While the assistance has made China a very favorable environment for homegrown EV sales, the centralized support has made the market somewhat unwieldy. Kennedy says EV makers in China have not increased their profitability, and that there are likely too many companies making similar products, observing that “such a sharp gap between supply and demand would likely result in industry consolidation” in “a well-functioning market economy.”
Nevertheless, Kennedy warns that the consensus of non-Chinese experts is that “Chinese EV makers and battery producers have made tremendous progress and must be taken seriously.” The Biden administration appears to already be doing so, with a 100-percent tariff on Chinese EVs – up from the earlier 25 percent – launched in 2024.
The USA is also trying to reduce its automakers’ dependence on EV battery materials from China, with the Critical Minerals Policy Working Group established to help develop America’s domestic EV supply chain. A leading Bank of American analyst thinks GM and the other Big Three automakers – Ford and Stellantis – should exit the Chinese market entirely to focus on developing their EV lineup using ICE pickup and SUV profits.
Meanwhile, GM has cut its forecast for both production and sales of EVs in 2024.
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Comments
China just wants the world to depend on them and them not depend on anyone. Perfect for leverage. The ultimate goal is to force everyone to depend on them for lithium and the fully built automobile would be icing on the cake. That way they can take Taiwan and whatever other sovereign land they can get their paws on and no one will be willing to stand up to them. “Two for me and none for you.”
Not sure that other countries are “lagging behind”. Could be that other countries have higher priority projects than supporting an industry that should be supporting itself.
LOL how much was lost in corruption and massive inefficiency? 80%
Cant take something like this seriously
Orrrr did we just rope a dope China. EV prices are plunging and used EV sales are lackluster. One year loss on new EVs is topping 40%.
With the massive advancements in battery technology looming there should be no rush to build LiIon/Li/Fe or LiPoly battery factories.