China’s $230 Billion EV Gamble: Subsidized Yet Striking

has poured a staggering $230.8 billion into its electric vehicle (EV) industry over the past decade, according to a new analysis by the Center for Strategic and International Studies (CSIS). This massive government support, representing nearly 19% of total EV sales from 2009 to 2023, has propelled China to the forefront of the global EV race, reports CNBC.

The CSIS report, authored by Scott Kennedy, trustee chair in Chinese Business and Economics, highlights how Beijing's support extended beyond just monetary subsidies. China implemented non-monetary policies favoring domestic automakers over foreign competitors.

Kennedy noted, “There are some exceptions, but in general Western automakers and governments have dilly dallied and not been aggressive enough.”

Despite some early missteps, like companies cheating the government out of over $140 million in subsidies, China's EV push has paid off. Chinese EV makers and battery producers have made “tremendous progress” according to independent auto analysts and Western automakers interviewed by Kennedy.

However, the rapid growth has come at a cost. Extensive government support and market expansion haven't significantly boosted profits for Chinese EV companies. Major players like BYD and have seen their net profit per car decline. The industry is also grappling with an intense price war, with companies slashing prices or launching budget models.

The U.S. is now ramping up its own EV initiatives, allocating $370 billion for clean technologies in the Inflation Reduction Act. But China's head start and the scale of its investment will be hard to match. As Kennedy put it, “Chinese EV makers and battery producers… must be taken seriously.”

EVXL's Take

China's EV boom is a double-edged sword for the drone industry. On one hand, advancements in battery tech and manufacturing driven by the EV sector could accelerate progress in electric drones. Cheaper, lighter, longer-lasting batteries would be a boon for drone makers.

However, the cutthroat competition and razor-thin margins in China's EV market are concerning. If key battery suppliers get squeezed out or EV giants like BYD decide to enter the drone space, it could disrupt the competitive landscape.

EVXL will be keeping a close eye on spillover effects from China's EV industry as we continue to track developments in electric drone technology. While there may be some turbulence ahead, the long-term potential for electrification to revolutionize both ground and air transportation is undeniable.


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Haye Kesteloo
Haye Kesteloo

Haye Kesteloo is the Editor in Chief and Founder of EVXL.co, where he covers all electric vehicle-related news, covering brands such as Tesla, Ford, GM, BMW, Nissan and others. He fulfills a similar role at the drone news site DroneXL.co. Haye can be reached at haye @ evxl.co or @hayekesteloo.

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