Notes

BYD Car, a Chinese Electric Car Manufacturer, Will Lead the Way if the EU Imposes Tariffs on EVs

EVs are not only knocking sales of combustion engine cars, but they're overthrowing accepted positions, hierarchies, listings and concepts of what makes a fantastic vehicle. And at the forefront of this paradigm shift are Chinese companies, consisting of some that were as soon as dismissed as rip-off brand names by multinationals with years of internal combustion engine expertise. This dominance is no mishap: Extensive government initiatives targeting the market during the past 15 years made it possible for Chinese car manufacturers to leapfrog their foreign competitors and take advantage of rapid technological advances in battery technology and consumer approval of EVs.
The result: By 2022, China will sell more EVs than any other country, including the United States. And that supremacy may get back at more powerful if the European Union succeeds in imposing tariffs on Chinese aids for its own EV manufacturers, which Beijing insists are a naked protectionist move that will interfere with the global supply chain and harm EU-China trade relations.


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In China, where license plates are rationed for those who do not own their own cars, the government made it simple to buy an EV by providing tax breaks, monetary incentives and slashed automobile rates. And when those aids ended this fall, most Chinese automakers slashed their own rates again to keep selling.
A few years earlier, when EV production was still in its infancy, China also encouraged local governments to equip their taxi and bus fleets with them by providing big aids for companies that did so. BYD Auto, a maker of electrical cars and buses that is now the world's biggest manufacturer, was among the big winners in this strategy. The company was able to rapidly grow its production capability, which has actually now reached 55 million vehicles each year, and expand its footprint beyond China's borders.
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But, in addition to using carrots, the Chinese federal government has also known when to utilize a stick. To prevent the growing EV market from ending up being too oversupplied, it set quotas for the proportion of electric automobiles that must be produced by both domestic and foreign companies. Business that satisfied or surpassed the quotas were rewarded, and those that failed were fined.
Then, to additional increase EV sales, it cut the cost of lithium batteries and promoted their adoption by needing that all vehicles sold in the nation be equipped with them. It was a win-win policy that has assisted to press the country from a low- to mid-market position in EV sales worldwide.
However while China is an international leader in EV production and intake, it's still not as proficient at selling them abroad. And that might be the most significant challenge to its future growth. The current geopolitical climate in lots of countries where Washington and Beijing have a frosty relationship suggests that they are reluctant to invite Chinese companies with showrooms, car dealerships and charging networks. This makes it challenging for business like BYD Auto to develop a significant presence in the United States, where it currently offers just a handful of its SUVs.



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