Electric vehicles in China: BYD strategies and government subsidies

Abstract

Central and local governments in China are investing heavily in the development of Electric Vehicles. Businesses and governments all over the world are searching for technological innovations that reduce costs and increase usage of “environmentally friendly” vehicles. China became the largest car producer in 2009 and it is strongly investing in the manufacturing of electric vehicles. This paper examines the incentives provided by Chinese governments (national and local) and the strategies pursued by BYD, the largest Chinese EVs manufacturer. Specifically, our paper helps to show how government support in the form of subsidies combined with effective strategies implemented by BYD helps to explain why this emerging industry has expanded successfully in China. Our study is based on primary data, including interviews with company headquarters and Brazilian subsidiary managers, and secondary data.