How subsidies shape global car and EV production

Government support has been a longstanding feature of the car industry. This includes the rescue of several carmakers during the global financial crisis of 2008-09, which caused support to reach an unprecedented level before it was quickly unwound. More recently, the industry has seen the arrival of new entrants entirely specialised in the production of electric vehicles (EVs) and plug-in hybrids, contrasting with legacy carmakers who generally combine their older line-up of internal combustion engine vehicles with more recent EV models. These new EV entrants (i.e. pure-play EV makers) have generally received larger subsidies relative to their revenue than legacy carmakers, reflecting both their smaller size and governments’ focus on supporting the development of their local EV industry. The difference in subsidy intensity, measured as a percentage of revenue, appears, however, to have narrowed over time as pure-play EV makers have grown their sales