By: Abdulaziz Al-Anjeri

Founder & CEO 

Reconnaissance Research 

I recently encountered an Auto Express article by Andy Palmer, a renowned figure in the automotive world, discussing how BYD, a Chinese automaker, has surpassed Volkswagen to become China's top-selling car brand for the first time in history. He also emphasizes the role of government subsidies in the success of China's EV manufacturers.

It's crucial to acknowledge that governments globally often support their industries, with countries such as the United States, South Korea, and the United Kingdom actively engaging in these practices. While this assistance has benefited numerous industries, some have faced obstacles, and a few have even encountered significant failures.

For example, the U.S. government granted Solyndra, a clean energy company, a $535 million loan guarantee in 2009 as part of the Obama administration's clean energy initiative, only for the company to declare bankruptcy in 2011. South Korea's Daewoo Shipbuilding faced financial turmoil in 2015, prompting government intervention and financial aid. Fisker Automotive, another recipient of a U.S. government loan guarantee, filed for bankruptcy in 2013. Cases like these, as well as British Leyland and Rover Group in the UK, demonstrate that government subsidies don't ensure success. Thus, BYD's accomplishments, driven by innovative thinking, should not be diminished by state subsidies.

China's significant progress in the EV market poses a challenge to the traditional Western dominance. However, it's worth noting that the UK, Europe, and the West in general have somewhat hindered their progress through internal disputes and partisan conflicts over the past decade. These distractions have shifted focus and resources away from sustainable growth, inadvertently providing China an opportunity to strengthen its economy.

Additionally, concerns about China's control over vital raw materials like lithium and cobalt should motivate countries to diversify their supply chains and explore alternative technologies. This strategy could reduce reliance on a single source and foster innovation in the sector.

In conclusion, I believe China's emergence can bring promising growth prospects and access to new possibilities and partnerships, particularly in regions that have historically enjoyed limited privileges, such as Asia and the Middle East.