We hear it all of the time. "The only reason that China's auto industry is so far ahead on electric vehicles is because it was so heavily subsidized by the government," critics say But that sentence is only partially true. It's certainly accurate that some Chinese automakers are state-owned, and that nearly all have benefitted generously from national, state and local subsidies and tax exemptions—some $231 billion over 15 years, by certain projections.
Yet that's only part of the story. The other part is that China's automakers leveraged lower labor costs and the country's massive engineering workforce, learned from their Western joint venture partners and other companies (especially Tesla) and dealt with intense internal competition within the country's growing new car market. All of those factors combined to create a generation of new EVs, plug-in hybrids and extended-range EVs (EREVs) that the rest of the world is trying to catch up to.
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