Last month, the EU launched an investigation into the privileged position of electric cars made in China due to subsidies. This does not only apply to Chinese manufacturers, but to all electric cars produced in China that are exported to the European market. Following this case, the New York Times revealed that China subsidizes the Nio with 32,000 euros per car.

In 2020, Nio was facing bankruptcy. The Chinese government gave about one billion euros to save the company, but it was not just financial support, because with that money the government bought a 24 percent stake in the company. After that, there was another financial injection from an unnamed state banking house in the amount of 1.5 billion euros.

In addition to government support, Chinese car manufacturers have another big advantage in terms of low prices compared to manufacturers from Europe and the US, and that is the lower cost of labor. A manufacturing worker there earns about a third of what an American or European auto worker earns annually. Also, Reuters recently wrote about an unnamed employee of the Changan Automobile Factory in Che-fei, who experienced a reduction in income and left his job in July, because his salary in May and June was only four thousand yuan a month (about 512 euros), instead of 900 euros as he expected.

When it comes to other electric car manufacturers, BYD is the largest Chinese electric car manufacturer, and in the first six months of this year, it made a profit of 1.35 billion euros. Some data show that the BYD Seal could be produced 35% cheaper than the Volkswagen ID.3, which, thanks to the technology, is another advantage of the Chinese manufacturer.

Source: New York Times