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Old 17th April 2024, 14:16   #1
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BYD received 3.4 billion euros via subsidies to dominate EV markets says study

A new study by Germany's Kiel Institute of World Economy states that Chinese EV maker, BYD, has received over 3.4 billion euros of direct government subsidies as part of the country's push to dominate the global electric vehicle industry.

BYD, China's largest EV maker, is said to have received 220 million euros in 2020, which jumped to 2.1 billion euros by 2022. As per reports, the EV maker is also benefitting from supporting local battery manufacturers. The Kiel Institute of World Economy stated that these subsidies given to BYD "have allowed Chinese firms to scale up rapidly, to dominate the Chinese market, and to facilitate increasing expansion into EU markets."

BYD received 3.4 billion euros via subsidies to dominate EV markets says study-seal.jpg

The Kiel Institute also mentioned how almost all of China's listed companies have received direct handouts, which are "at least three to four times higher" than in any large EU country.

However, Chinese authorities have come out stating that its carmakers are winning the EV race because of superior products, relying on "continuous technological innovations".

BYD started off as a battery manufacturer and has now become the world's largest EV brand, rivalling the likes of Tesla. At the end of 2023, BYD's net income was reported to be around $4.2 billion, thanks to selling a range of EVs and PHEVs.

Source: Bloomberg

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Old 17th April 2024, 14:44   #2
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Re: BYD received 3.4 billion euros via subsidies to dominate EV markets says study

This comes as no surprise to many, who always suspected Chinese govt hand in BYD's growing footprints.

BYD appears as great option to customers across the world and many simply avail the option, but it goes against the fundamental concept of global trade in principle and spirit. This is a ploy by Chinese govt to control the global market, once they have their way, most of us can't even imagine what lies ahead for future generations.

Read - Debt Trap Diplomacy (Link )

Commoners are tuned to think few years ahead, few visionaries can think & plan 5-10 years in future but Chinese govt can afford to think and plan for 25 (or even 50) years ahead. None of the democracies would be able to do it.
This itself give them an undue advantage and their thought process is certainly not benevolent.

I really hope EU & US take appropriate measure to contain the damage and keep Chinese at bay.
As long they continue to create trouble at borders, Indian govt will keep throwing spanner in their India plans.

Interesting times ahead, for sure.

Last edited by Acharya : 17th April 2024 at 14:46.
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Old 17th April 2024, 15:16   #3
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Re: BYD received 3.4 billion euros via subsidies to dominate EV markets says study

Yes, agreed. These things are kind of an open secret.
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Old 17th April 2024, 15:27   #4
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Re: BYD received 3.4 billion euros via subsidies to dominate EV markets says study

China always goes ahead with go in and go large. When they saw the adoption of EV in future. They went in to grab all access to lithium mines in south america and certain parts of africa .

Here’s a quote from an article -“ In the global battery supply chain, China is everywhere. Tianqi Lithium also owns stakes in SQM, Chile’s biggest mining company, and Greenbushes, Australia’s biggest lithium mine. Both Tianqi Lithium and its domestic rival Ganfeng Lithium have signed deals across South America’s “lithium triangle,” a mineral-rich part of the Andes at the junction of Argentina, Bolivia, and Chile. It’s a similar story for other rare-earth materials needed for batteries: China controls 70 percent of the mining industry in the Democratic Republic of the Congo, home to almost all of the world’s cobalt, another critical component of lithium-ion batteries.“


China is eyeing for dominance everywhere globally. And since their govt’s core ideology is expansionism. Vigilance at every step is crucial. I hope new battery chemistry and new policies to control the dumping from china comes in place soon.
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Old 17th April 2024, 16:44   #5
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Re: BYD received 3.4 billion euros via subsidies to dominate EV markets says study

This is nothing new. Most of the countries in the bid to develop a particular industry , tend to provide huge amount of support (policy wise, subsidy wise etc) to those industries.

The most famous case being the development of electronics industry in Japan, Taiwan and then Korea, where in these economies doled in huge amount of investments and policy support. The development of Samsung in Korea is a good example to study. CHina is doing just the same thing in EVs (and also in electronics manufacturing and AI).

Now, is it a good thing?? Debatable i would say. While we want US and EU to bring in more regulations on China(since China is proving to be a troublesome neighbour) , but let us understand that if China does not do what it is doing now, then they would forever be catering to low end jobs created by western markets. It is this shift of power which is unnerving the west more than anything else. India's Software industry story started in 90s but still we are lagging behind many in cutting edge software like AI.

Also, see how is Western developed reacting to this - by putting in trade tariffs, talking about how EVs are threat to national security, outrightly banning companies like Huawei etc. - all pointing towards saving their economies and industries from newcomer threats. A more fair approach from them would be to democratise the technologies so that no one country has the hegemony over them - if they really want to walk the talk.
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Old 17th April 2024, 17:59   #6
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Re: BYD received 3.4 billion euros via subsidies to dominate EV markets says study

What about the US, EU automakers that got billions each in 2008-2010 bailouts. During this time none of the Chinese or Indian automakers got any bailouts.
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Old 17th April 2024, 18:08   #7
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Re: BYD received 3.4 billion euros via subsidies to dominate EV markets says study

Why do all these articles say BYD started as a battery manufacturer? From my China visit in 2010-11, I remember seeing some weird-looking BYD cars that were rip-offs of well-known global brands. China's government has a policy that they will own a majority stake in at least one of the top 3 companies in any sector.
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Old 17th April 2024, 18:43   #8
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Re: BYD received 3.4 billion euros via subsidies to dominate EV markets says study

I don't understand these anti-chinese articles getting published since COVID to create hatred. What is USA doing to have companies manufacture semiconductors in the USA?
https://www.washingtonpost.com/techn...-taylor-texas/

This is double that of BYD and to just Samsung alone! Every country does it and every company lobbies for kickbacks.

Quote:
Originally Posted by naikameya View Post
Why do all these articles say BYD started as a battery manufacturer? From my China visit in 2010-11, I remember seeing some weird-looking BYD cars that were rip-offs of well-known global brands. China's government has a policy that they will own a majority stake in at least one of the top 3 companies in any sector.
They did start as battery manufacturers before venturing out into other businesses:
https://en.m.wikipedia.org/wiki/BYD_Company

Last edited by SmartCat : 17th April 2024 at 20:26. Reason: merged back to back posts
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Old 18th April 2024, 08:55   #9
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Re: BYD received 3.4 billion euros via subsidies to dominate EV markets says study

I do not see anything wrong with this. Every country wants to do what is best for itself. Consumers have the choice to make their own decisions. If at all, one must only appreciate the vision that the Chinese have had. Every century, a few countries dominate and that is the nature of the beast. In our own country, conglomerates that didn't exist a decade ago are now multi-billion dollar behemoths and all that was made possible with center and state assistance, not forgetting the loans from nationalized banks.
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Old 18th April 2024, 10:00   #10
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Re: BYD received 3.4 billion euros via subsidies to dominate EV markets says study

Quote:
Originally Posted by ajitmoses View Post
Consumers have the choice to make their own decisions.
For a Govt in power, whether in US/Europe/India, protecting local jobs & industries from unfair competition is 100x more important than giving consumers a choice. Just to be clear, local industry also includes foreign companies that have a manufacturing unit in their country.

If it can be proved that Chinese EV makers are receiving subsidies, it means US/Europe will now be ALLOWED to slap import duties on EVs, under WTO rules. These tariffs are called countervailing duty. https://en.wikipedia.org/wiki/Countervailing_duties

Quote:
Countervailing duties (CVDs), also known as anti-subsidy duties, are trade import duties imposed under World Trade Organization (WTO) rules to neutralize the negative effects of subsidies. They are imposed after an investigation finds that a foreign country subsidizes its exports, injuring domestic producers in the importing country. According to World Trade Organization rules, a country can launch its own investigation and decide to charge extra duties, provided such additional duties are in accordance with the GATT Article VI and the GATT Agreement on Subsidies and Countervailing Measures.
If China drags US/Europe to WTO court, the case will be thrown out.

Last edited by SmartCat : 18th April 2024 at 10:09.
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Old 18th April 2024, 10:40   #11
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Re: BYD received 3.4 billion euros via subsidies to dominate EV markets says study

This is same as PLI schemes ran by our country to promote local production or bail outs provided by other countries to ailing auto manufacturers or funds provided by US under Inflation reduction act.

Every country wants to promote their industry and export to the world. It is for the importing countries to see how much they want to support the import from these countries.
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Old 18th April 2024, 11:07   #12
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Re: BYD received 3.4 billion euros via subsidies to dominate EV markets says study

Damn if you do, damn if you donít.

The launch of the BYD Seal spawned a fanbase of those in appreciation of BYDís VFM pricing, especially with respect to luxury brands. And now we call them out for their dubious policies.

No one stopped other nations and manufacturers taking advantage of state policies. But not many have the inclination, inspiration and/or wherewithal to carry out such an aggressive move.
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Old 18th April 2024, 11:19   #13
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Re: BYD received 3.4 billion euros via subsidies to dominate EV markets says study

China has taken massive strides forward in mass-manufacturing processes. Regarding design and R&D, they just sidestep IP laws and violate patent regulations with impunity. The Chinese government spends a large amount of money and resource in managing its centrally planned economy and have built up several committees to oversee every aspect the individual corporations' progress. Any fat built up is immediately trimmed. This allows them to aggressively hit markets with very little maturing time. Regarding the quality of the product, BYD has access to the QC and QA literature of OEMs tied up with its parent companies.

Just look at the new Volvos, Polestars and MGs. They might be all European brands, but the products are developed with massive Chinese input. Although, I'm just speculating here, Volvo's decision to move to a touchscreen only interface might have been from China. There is no way the sensible Swedes would've thought integrating major functions into distracting screens would be a good idea. There were rumors that the battery tech that put BYD on the map was actually stolen from a major Japanese battery giant.
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Old 18th April 2024, 11:55   #14
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Re: BYD received 3.4 billion euros via subsidies to dominate EV markets says study

These reports are purely based on fear about BYD's tech fineness and costing. For that matter even Xiaomi too.

As a consumer I need the best efficient tech for the cheapest price as much as possible. If the so called governments have to protect local jobs and unfair competition, then they should fund local companies to help ramp up cutting edge technologies to compete those Chinese giants head on with their A games.

Here local ingenious BEV technologies are still in nascent state and most BEV parts are imported from China only.

Simply banning or restricting China will not be helpful for any country that matter. Trump government put sanction on Huawei and took away GMS and chip import then. But now Huawei is getting stronger day by day with their own tech innovations.

I don't find any wrong doing by Chinese government for providing huge subsidies to BYD.

Quote:
Originally Posted by ferrarirules View Post
This is same as PLI schemes ran by our country to promote local production...

It is for the importing countries to see how much they want to support the import from these countries.
Exactly.

In another US news Samsung electronics to receive up to $6.4 billion in direct funding under the CHIPS and Science Act Link

I really hope BYD will find a local partner soon and start bringing their world class products and tech to India asap.

Last edited by myavu : 18th April 2024 at 11:59.
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Old 18th April 2024, 12:47   #15
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Re: BYD received 3.4 billion euros via subsidies to dominate EV markets says study

The companies are heavily under the influence and are almost front of the chinese government. This is different from companies of other countries just receiving subsidies or support. They also have a proven strategy to destroy the local manufacturing capability of the countries they operate in by undercutting the price. If the border situation deteriorates expect a knee jerk reaction from our government and if the situation necessitates, active takeover and exploitation of the 'assets' by the other country.
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