EU to Investigate BYD’s Dominance Attributing It to Govt. Subsidies

It is reported that renowned Chinese automaker BYD has received direct government subsidies worth up to €3.4 billion (RM17.3 billion). According to Autoblog, this subsidy  indicates Beijing's aggressive desire to dominate the global EV and clean technology industries space, with said automaker now touted as the frontrunner in new energy vehicle (NEV) production globally.

This was based on a report by Kiel Institute in Germany, indicating China’s subsidies to BYD had increased from €220 million (RM1.1 billion) in 2020 to €2.1 billion (RM11 billion) all in a short two years span. This enormous financial backing, combined with help to local battery makers and customer discounts, has permitted BYD's quick rise in both the global and Chinese market, not to mention its growing presence in the EU.

The European Union is looking into suspected disproportionate help to China's EV sector, citing worries about unfair trade practices. This examination comes amid appeals from countries such as France to address the economic danger presented by an influx of Chinese-made products into the EU market.

Elon Musk, Tesla's CEO, recently expressed worry about the competitive threat presented by Chinese automakers in the global electric vehicle industry (EV). This comes after BYD, a Chinese EV maker backed by Warren Buffett, surpassed Tesla as the world's best-selling EV business in the fourth quarter of 2023.

To offset China's supremacy in clean technology, the EU established a €40 billion (RM205 billion) innovation fund, while the United States provided subsidies under the Inflation Reduction Act.

China, on the other hand, responded to the EU's investigation with a roundtable discussion among Chinese automotive firms recently in Paris, where China's Commerce Minister, Wang Wentao, denied that Chinese EV-makers rely on subsidies to gain a competitive advantage, citing technological innovation and robust local supply chains rather than government support.

BYD, which began as a battery maker, has significantly expanded into EV and plug-in hybrid technology, taking advantage of China's burgeoning domestic auto market and generous EV purchasing incentives.