In the last few years, venture capitalists rushed to pour billions of dollars into the emerging electric vehicle industry backed by the Chinese government. So far, it’s less clear how that bet has paid off. Take a look at the recent headlines:
Now, Chinese auto sales are in a slump, consumer subsidies for new energy vehicles are phasing out next year and economic growth is slowing.
Start-ups didn't expect the subsidies to last this long, said Rupert Mitchell, chief strategy officer at Chinese electric car company WM Motor, founded in 2015 by a former Volvo and Geely executive. “What was not in the business plans was that China would have its first fully blown automotive downturn in Chinese history," he told CNBC in late November.Wan Gang was an engineer for Audi in Germany before he returned to China in the early 2000s. Within 10 years, he became China's minister of Science and Technology, despite not being a member of the Chinese Communist Party.
Wan convinced the central government to roll out a national strategy for developing new energy vehicles and battery technology. Beijing was eager to jump at an opportunity to become a global leader in an emerging technology, which conveniently tied into efforts to combat pollution.in subsidies between 2009 and 2015, according to the Ministry of Finance.
At the height of the subsidy-driven boom, the number of new energy vehicles sold in 2014 more than quadrupled from the year before, and multiplied by more than four times in 2015 to more than 330,000 vehicles, according to data from China Automotive Industry Association accessed through Wind Information.. That year, new energy vehicle sales grew just 53%, data showed.
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