The Lesson From BYD's EV Takeover: Don't Discount China

Last quarter, Chinese automaker BYD surpassed Tesla as the world's biggest producer of EVs. A handful of other Chinese EV makers are planning to rapidly expand in the European market with much cheaper offerings than their European and American competitors. Chinese electric vehicles are on the rise in part because of strategic decisions made more than a decade ago-both within companies and at the national level-to develop the capacity to manufacture clean technology. In 2009, in the wake of the global financial crisis, China launched a number of subsidy programs to advance clean technology, including electric vehicles. Estimates vary, but various analyses agree that the total value of the Chinese government's EV subsidies between 2009 and 2022 measured in the tens of billions of dollars, if not more. Today Chinese companies have also taken a lead in the manufacturing of a range of clean energy technologies, from solar panels to lithium-ion batteries, leaving American companies behind. There is a lesson here for companies in other sectors beyond energy and automotive: ignore the energy transition at your own risk.