6. The risks of China's EV push
Let's take another break from the election coverage!
A pair of Center for Strategic and International Studies analysts are out with a look at China's robust government subsidies aimed at growing the electric vehicle industry — and potential unwelcome consequences.
Why it matters: China is the world's largest auto market and EV sales are growing quickly there, surpassing 1 million this year alone (by contrast, that's roughly the total ever sold in the U.S.)
By the numbers: CSIS' Scott Kennedy and Mingda Qiu calculate that between 2009 and 2017, Chinese national and state authorities invested $58 billion in the industry.
- Roughly $37 billion of that is for buyer subsidies.
- The remainder is for vehicle procurement, sales tax exemptions for buyers, charging infrastructure and R&D.
But, but, but: They argue that China's heavy support comes with a suite of risks. One is that with so many EV producers, it will be "nearly impossible" for any of them to become profitable in the near future.
- Another risk, with so many cars rolling off the lines, is "massive overcapacity."
- And that could have trade ramifications, especially if Chinese consumer interest lags, because companies could begin exporting cars at deeply discounted prices.
Between the lines: "[T]he result could be millions of Chinese cars dumped on global markets, which could threaten the livelihoods of producers up and down the supply chain that are not the beneficiaries of the Chinese state’s deep pockets," they write.
Read more of the whole piece.