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China’s EV Market Success Is Due To ‘Constant Innovations,’ Not Subsidies, Says Commerce Minister Taking A Dig At Yellen’s ‘Overcapacity’ Concerns – Tesla (NASDAQ:TSLA)

China's EV Market Success Is Due To 'Constant Innovations,' Not Subsidies, Says Commerce Minister Taking A Dig At Yellen's 'Overcapacity' Concerns - Tesla (NASDAQ:TSLA)


In a recent roundtable discussion, China’s Minister of Commerce, Wang Wentao, has refuted claims that the rapid growth of the country’s electric vehicle (EV) industry is due to subsidies. Instead, he credits “constant innovations” for the industry’s success.

What Happened: Wang made these comments during a discussion in Paris, which included representatives from over 10 Chinese companies, such as EV manufacturers Geely and BYD, and EV battery maker CATL, reported CNBC.

Wang dismissed allegations of “overcapacity” from the U.S. and Europe, asserting that China’s EV advantage is due to a “well-established supply chain system and market competition.” He also highlighted the Chinese EV industry’s “important contribution to the global response to climate change as well as green and low-carbon transformation.”

See Also: Tesla CEO Elon Musk Disagrees With Nvidia’s Jensen Huang That Anyone Can Make Their Own Neural Network: ‘It’s Insanely Hard’

The discussion primarily revolved around the EU’s anti-subsidy probe into electric vehicle imports from China. In October, the EU initiated an investigation to see if it should impose tariffs on imports of battery EVs from China “to offset state subsidies and to level the playing field” following a significant increase in imports.

During her ongoing visit to China, U.S. Treasury Secretary Janet Yellen expressed her concerns about the impact of Chinese industrial overcapacity on the U.S. economy. She intended to “advocate for a level playing field for American workers and firms.”

Why It Matters: This discussion comes amid a backdrop of increasing competition in the EV market. Earlier this month, Chery Auto, a major Chinese car manufacturer, announced plans to launch a new EV brand in Q3 2024. Furthermore, BYD, a Chinese EV giant, is reportedly considering entering the EV pickup truck market, similar to its U.S. counterpart, Tesla.

These developments coincide with Yellen’s four-day visit to China, where she expressed concerns about the global risks associated with China’s manufacturing overcapacity. This visit and the ongoing EU investigation highlight the global scrutiny of China’s EV industry and its growth strategies.

Read Next: Cathie Wood’s Ark Invest Doubles Down On Tesla Despite 3.6% Plunge Amid Model 2 Rumors, Adds $22M Worth Of Shares

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