China Already Spent $230 Billion and More in Their Electric Vehicle Industry

By Thea Felicity

Jun 21, 2024 01:28 PM EDT

Lei Jun, CEO of Chinese smartphone maker, stands next to Xiaomi SU7 model electric cars during a press conference at the Beijing Auto Show in Beijing on April 25, 2024.
(Photo : JADE GAO/AFP via Getty Images)

China has invested a staggering $230.8 billion over more than a decade to hold up its electric vehicles sector, as revealed by a recent analysis from the Center for Strategic and International Studies (CSIS) reported by CNBC.

The analysis further showed that this government support constituted approximately 18.8% of total electric vehicle (EV) sales between 2009 and 2023, citing Beijing's primary backing for domestic automakers amidst intensifying global competition.

The $230.8 billion that China has already spent on its electric vehicle (EV) industry will likely grow over time as the country continues to invest heavily in maintaining its competitive edge in the global EV market. 

Given the EV sector's strategic importance in reducing carbon emissions and advancing technological leadership, Beijing is expected to sustain or even increase its financial support.

READ MORE: BYD's EV Sales in Europe Outperforms China Profits Even With New Tariffs

Chinese EV Sales

Scott Kennedy, CSIS Trustee Chair in Chinese Business and Economics, noted a marked decline in the ratio of government spending to EV sales, dropping from over 40% in pre-2017 years to slightly above 11% in 2023. 

This financial injection has been complemented by non-monetary policies favoring local automakers over foreign counterparts, contributing to the sector's rapid growth within China's expansive automotive market.

The findings come amid escalating trade tensions, particularly with the European Union's tariffs on Chinese EV imports over subsidy concerns. At the same time, the U.S. has recently hiked duties on such imports to 100%. 

Kennedy emphasized that despite these challenges, Western automakers and governments have lagged in fostering comparable conditions to propel their EV industries forward.

In response to Beijing's strong state support, some analysts suggest that major US automakers may need to reconsider their strategies in China because they face difficulties maintaining profitability and market share.

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