China offers EV industry billions of yuan in subsidies, EU launches investigation

China's generous subsidies to the EV sector came under fresh scrutiny as an analysis of listed companies revealed substantial government money flowing to the financially important industry.

According to information gathered by Chinese information provider Wind and a survey by Nikkei Asia, five of the top 10 recipients of government grants among the more than 5,000 mainland Chinese listed companies during the first half of this year were local producers of EVs or the batteries that power them.

The company at the top of the list, Contemporary Amperex Technology, or CATL, received 2.85 billion yuan ($391 million) in government subsidies over the course of the last six months, nearly a threefold increase from the previous year. 

One of CATL's key rivals, EVE Energy, also appeared on the list due to an unexpected rise in subsidies. In the first half of the year, the EV battery manufacturer in Guangdong got 1.08 billion yuan, which is almost four times higher than the previous year.

SAIC Motor, which is listed on the Shanghai Stock Exchange, received more than 2 billion yuan in subsidies from the government, nearly twice as much as it did a year earlier. 

On the list of subsidies, SAIC was closely followed by BYD, which is the top-selling auto brand in China and is expected to overtake Volkswagen this year.

EVs from China will be the subject of a probe, European Commission President Ursula von der Leyen announced in her State of the Union address on September 13. In her speech, she said that cheaper Chinese electric cars had flooded the market and that this had distorted the global market by keeping their prices artificially low through significant state subsidies.