China, rain of subsidies for electric cars.  For BYD 3.4 billion euros

China, rain of subsidies for electric cars. For BYD 3.4 billion euros

European Union launched an anti-dumping investigation last year in electric vehicles made in China. An investigation that could lead to the EU establish a special customs duty on BEV vehicles imported from this country. As we know, the results of the study will arrive at the end of the year. At the moment, the European Commission has limited itself to saying that it has enough evidence to show that Chinese electric cars they have been wrongly subsidized.

China, for its part, has named a defender of the subsidy probe and said its manufacturers are winning the race with electric cars and high-quality products.

Now, Automotive News Europe reports A study conducted by the Kiel Institute estimates the subsidies that the Chinese government would guarantee to its car manufacturers.. According to the institute, which advises the German government, these grants “have enabled Chinese companies to expand rapidly, to dominate the Chinese market and facilitate the growing expansion in European Union markets.“.

Regarding the automotive industry, according to reports, government aid they were at least three or four times higher to those issued by major EU and OECD countries. Moreover, it seems that the Chinese company benefited the most from these subsidies that would be BYD.

The Kiel Institute report adds that almost all listed Chinese companies received direct subsidies in 2022. The subsidies allowed companies to make rapid progress in many key sectors. Certainly about BYD, the Chinese car manufacturer they would receive aid estimated at least 3.4 billion euros.

According to the Kiel Institute, support for China’s leading electric car manufacturer would rise from 220 million euros in 2020 to 2.1 billion euros two years later.

However, it will not only involve easy cash transfers but also preferential access to key raw materials, forced technology transfers by foreign investors and favorable treatment in public procurement and administrative procedures. Figures that would in any case be ignored given that BYD was also able to rely on subsidies intended for battery manufacturers.

Overall, the company would receive more incentives for its electric vehicles than other Chinese manufacturers such as GAC or foreign companies such as Tesla.

BYD declined to comment on the report. What remains is to wait to understand how the EU investigation will be completed and if the new duties will actually arrive. Dirk Dohse, one of the authors of the report, said that the upcoming trip of German Chancellor Olaf Scholz to China could represent a good opportunity to discuss the subsidy issue with Beijing. The authors of the report recommend, in fact, to start negotiations with Beijing.