The Strange Political Economics of the Chinese Auto Industry
Chinese (BYD) Dancing Car Video link in text This is a case study of one country’s relationship with private companies in a major industry. The Chinese central government has made the production of electric vehicles (EVs) a national priority with massive subsidies, low interest loans, and tax breaks. Provincial, county, and local governments compete to attract an EV assembly plant. All levels of government entice new companies with a wide range of incentives and subsidies, including free land. The result is that in a short period of time about 100 new plants have been built; a few new ones are planned. The industry may have a total capacity of around 25-30 million cars. Production was 12.4 million cars in 2024 and 16.5 million in 2025. EV sales in China in the first half of 2026 was 2.3 million c...