According to a new German study, China heavily subsidizes the green technology sector, but BYD is the government's favorite, receiving “at least” $3.7 billion in subsidies.
BYD received this significant amount of direct government subsidies as part of the Chinese government's drive to become a world leader in electric vehicles and other clean technologies, according to a new study first reported by Bloomberg.
Germany's Kiel Institute for World Economics reported that BYD earned 220 million euros in 2020 and 2.1 billion euros just two years later. At the same time, direct subsidies increased from 1.1% in 2020 to 3.5% in 2022. In addition, the study's authors claim that BYD receives significantly higher premiums for purchasing EVs in China compared to other domestic manufacturers such as GAC or foreign companies that produce locally.
Of course, Europe isn't happy about what's going on – and while complaints about unfair trade practices aren't new, they've taken on new dimensions as Chinese electric car companies have gotten tougher. Back in October 2023, the EU launched an official investigation into the Chinese electric vehicle industry.
The European Commission has visited BYD, Geely and SAIC to gather information as part of an investigation into what it says are both subsidies and bank lending campaigns from Beijing that fueled the brands' excessive growth in China. The European Commission later said it was now considering retaliatory tariffs on Chinese electric cars to help European automakers stay in the game.