A recent analysis by the Center for Strategic and International Studies has revealed that the Chinese government has invested a staggering $230.8 billion to support electric vehicle (EV) firms between 2009 and 2023. This substantial figure far surpasses the $1 billion allocated by the US government for upfront clean vehicle tax credits this year.
The analysis highlights a significant increase in spending in recent years. While only $6.74 billion was spent between 2009 and 2017, this number roughly tripled during 2018-2020 and has continued to rise sharply since 2021.
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The Chinese government’s support for EVs takes various forms, including rebates, sales tax exemptions, infrastructure funding, and purchasing EVs for government use. Additionally, the government supports automaker research and development programs, with spending in this area increasing significantly in recent years.
The Center for Strategic and International Studies notes that their estimates are conservative and do not encompass all levels of government support, such as local incentives, land grants, electricity discounts, and supplier subsidies.
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Battery giant CATL reportedly received $809.2 million in subsidies last year, more than ten times the amount received in 2018 and nearly twice as much as in 2022.
The organization warns that the substantial government support has fundamentally altered the playing field, making it challenging for others to compete in China or anywhere else where Chinese EVs are sold. While China is not the only country supporting automakers and EVs, the scale of its support is immense.
However, this level of support has led to challenges, including an oversupply of EVs and profitability issues for many of the more than 200 EV firms in the country. Despite this, the Center for Strategic and International Studies believes that some Chinese automakers will become mainstays in the global industry.
