The Influence of Consumption Subsidy Policy on Chinas Domestic Electric Vehicle Market -- Take BYD as Example

Abstract

Chinas consumption subsidy policy is considered as a dominant factor in promoting the development of the domestic electric vehicle (EV) market, and companies like BYD have benefited from this policy. BYD, one of the leading EV manufacturers in China, has seen significant growth in EV sales since introducing the subsidy policy. This paper examines the influence that Chinas EV subsidy policy brings to BYD, highlighting the pros and cons of the policy and the challenges and opportunities faced by EV manufacturers in China. Specifically, the policy has helped to make EVs more affordable and accessible to consumers, but it has also led to overcapacity and intense competition among manufacturers. The policy has also been criticized for being too heavily focused on subsidies and insufficient on other measures, such as infrastructure development, necessary for the EV markets growth. By examining the subsidy policies and market performance of BYD, this paper highlights the effectiveness as well as drawbacks of the subsidy policy and the challenges and opportunities faced by EV manufacturers in China.