Nov. 12 at 4:26 PM
$F $GM $RIVN $SLDP
the wobbles in China’s EV sector demonstrate the downside of China’s state-led economic model. China’s government threw ample resources at the EV industry in the hopes of leapfrogging foreign rivals in the transition to EV’s. The Center for Strategic and International Studies estimates that the government provided more than
$230 billion of financial assistance to the EV sector from 2009 to 2023. The strategy worked: China’s EV makers would likely never have grown as quickly as they have without this substantial state support. By comparison, the recent Republican-sponsored tax bill eliminated nearly all federal subsidies for EVs in the U.S.
The problem is that China’s program encouraged too much investment in the sector. Michael Dunne, the CEO of a California-based consulting firm focused on the EV industry, counts 46 domestic and international automakers producing EVs in China, far too many for even the world’s second-largest economy to sustain.
