BYD received billions of dollars in funding grants from the Chinese government. The government also pays raw materials manufacturers to dump materials like steel and lithium on the domestic market at a loss.
The government tax break on the sales price of the vehicle is not really what's relevant here.
The subsidies are a different structure, but they each allow the companies to sell a more expensive car for a lower price - which is the global competition we're discussing.
The billions in funding (~2) for BYD is what I was discussing regarding about $1k/vehicle subsidy.
I would be very interested in any data you have regarding the amount of money the Chinese government has paid toward raw materials that have been consumed by BYD. Do you have a source you can link?
Firstly, EV subsidies are irrespective of manufacturer. The government is not hand picking a corporation to receive them all.
Secondly, I think you are vastly underrating the difference in "structure". If I was to pay you $100 an hour and give you a company credit card to go buy lunch, that's a much different proposition than asking you to go buy me lunch on the promise that I will reimburse you later. Corporations with a direct government investment are always going to have market advantage beyond just the price difference over companies that have to seek debt or investors.
This does not even begin to cover how the party provides political protections for the executives of these companies, or how the government aids these companies in stealing intellectual properties from trading partners.
Hmm. I appreciate the response but it does not address my concern. The reason is I'm trying to quantify the subsidization. I think what you are trying to articulate is that a $1k subsidy (in the form of a corporate credit card analogy) is equivalent to or greater than a $9k subsidy (in the form of reimbursement analogy). That's not as obvious to me as it is to you, because I have trouble quantifying the end market effect. It's also an order of magnitude difference in the actual amount of subsidy: the analogy I guess would be a company allowing you to spend $100 with the corporate card for dinner, or reimbursing you $900 for dinner? Again I'm struggling to see how one is obviously anti-competitive vs the other.
I'm very interested in hard, quantifiable numbers. I've read lots of articles that have various types of qualifications/characterizations but they don't help. For example, the fact that China's economy is producing 4x the battery capacity as domestic need is forecast - in terms of competitiveness what does this mean for BYD? Does it amount to their being able to sell a car for $10 cheaper? $100? $1000?
I think ascribing a unit price to the Chinese government's grants is what is misleading.
To put it another way: Each company only ever produced one car and sold it in the US - no tariffs. A Tesla buyer would receive $7500 from the US government and Tesla would receive $0. A BYD buyer would receive $7500 from the US government, and BYD would have already gotten $3 billion dollars from the Chinese government.
Note: Tesla does get the $7500 and gets it immediately, from the customer, who is then reimbursed later by the US government. If you check Tesla's website they count on this: they advertise Tesla prices after the rebate, even though the customer will go out of pocket for more.
This may be a moot point though. Before Telsa gets this $7.5k, Tesla gets a subsidy of $1.5k in regulatory credits per vehicle from the US government for producing electric vehicles (around the same / more than BYD gets per vehicle from the Chinese government).
BYD received billions of dollars in funding grants from the Chinese government. The government also pays raw materials manufacturers to dump materials like steel and lithium on the domestic market at a loss.
The government tax break on the sales price of the vehicle is not really what's relevant here.