From Reason magazine, September 24:
China has dominated the market—thanks in part to a robust industrial policy.
The odds are stacked against many Chinese electric vehicle (E.V.) firms. And yet they keep hanging on.
A decline in federal government subsidies, tariffs from abroad, intense price competition, and waning demand should have led to a consolidated Chinese E.V. market. But local governments have used incentives to keep half-dead E.V. firms from shuttering, and in some cases, even revived dead ones.
Such Chinese E.V. manufacturers have benefited greatly from massive industrial policy support from the government. A combination of "generous government subsidies, tax breaks, procurement contracts, and other policy incentives," as laid out in the MIT Technology Review, helped create the dominant E.V. market China has today. In just the Chinese domestic market, for example, E.V. ownership reached 13.1 million in 2022, accounting for 60 percent of global sales.
China's industry dominance, however, has raised eyebrows among many legislators in the U.S. and European Union, who see China as a threat to their manufacturing sectors. In response, China has steadily phased out many forms of subsidies. According to estimates from the Center for Strategic and International Studies (CSIS), subsidies per vehicle dropped nearly 66 percent between 2018 and 2023.
And yet most Chinese E.V. companies are still reliant on subsidies. As corporate earnings reports show, only BYD Auto has managed to make a profit....
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Meanwhile at Nikkei Asia, September 25:
Chinese electric vehicle maker Neta Auto is ramping up an overseas push as tough competition at home and rising trade barriers keep its founder unsure about the company's own life expectancy.
"I'm not saying or boasting now that Neta Auto will definitely survive in three to five years," Chairman Fang Yunzhou told Nikkei Asia in a recent interview, providing a glimpse of the harsh conditions in the EV sector. He vowed to press on by sticking to "three core values" of technological innovation, customer service and product safety....
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