A recent study reveals the extent of the Chinese government’s involvement in the development of the electric car industry. Between 2009 and 2023, Beijing allegedly granted 215 billion euros to its national constructors to make them champions.
A 215 billion euro gift from Beijing
A report published on June 20, 2024 by the Center for Strategic and International Studies shows how China has helped its automotive constructors become champions in electric vehicles. Researchers estimate that Beijing spent a colossal sum of 230.8 billion dollars (approximately 215 billion euros) to support its national companies between 2009 and 2023.
This is a huge figure, overshadowing the mere one billion dollars unlocked by the U.S. government in 2024 to promote the development of electric cars. While all expenses did occur between 2009 and 2023, the vast majority of funds were actually released starting from 2017. Before this date, only 6.74 billion dollars had been spent.
China supports the electric car industry in several ways, including exemption from sales tax, financing of infrastructure, and financial support for various research and development programs initiated by automotive constructors. The analysis firm’s figures are only estimates. In reality, Beijing’s involvement could be even more significant.
For example, the study does not take into account local financial incentives, discounts on manufacturers’ energy bills, or even subsidies granted to suppliers. While China is not the only country supporting its industry towards electrification, this financial support is particularly massive. There is currently no equivalent around the world.
Nearly 200 electric vehicle manufacturers in China
This political strategy has profoundly changed the rules of the game in the automotive industry. The report’s authors believe that it will now be “much more difficult for other brands to compete in China and anywhere else where Chinese electric cars are sold.” Today, the country is home to approximately 200 companies specializing in electric vehicles.
This leads to a price war in the domestic market and trade tensions with other major global economic powers. While researchers from the Center for Strategic and International Studies believe that a number of Chinese automotive constructors will eventually collapse, they assert that some will inevitably become “pillars of the global industry.”