> to destroy other Chinese car manufacturers and profitability is not required until subsidies run out
So the Chinese government is subsidizing BYD in order for them to destroy every other Chinese car manufacturer? I think the Chinese government has far less convoluted and costly schemes to control which businesses live and which die.
If I understand it correctly, your theory is like saying the US set such high tariffs and sanctions so Chinese companies adapt and get so strong they can eventually outcompete any US company and break free of any dependency.
You misunderstand. It doesn't matter much for BYD's pricing whether they're subsidized or not, but it matters very much that their competitors are. They'll charge as much as they can get away with, and competing against other Chinese manufacturers, they need to go a lot lower.
Note that there's two different kinds of Chinese government involved here: the central government primarily wants to build up the EV industry and is mostly agnostic between manufacturers, hence the sales subsidy. Regional governments want to build up their own economy, so they give preferential treatment to companies that manufacture in their region.
So it's not, as you thought, that the central government is specifically subsidizing BYD in order for them to destroy every other Chinese car manufacturer, but that regional governments are subsidizing local competitors in order to protect them from being destroyed by BYD.
But those subsidies won't last forever, and once they run out, many manufacturers will go bankrupt (see original 2019 Zhidou bankruptcy). Once that happens, BYD will most likely be able to cement their market dominance and raise prices to finally be able to make a decent profit even on domestic sales.
So the Chinese government is subsidizing BYD in order for them to destroy every other Chinese car manufacturer? I think the Chinese government has far less convoluted and costly schemes to control which businesses live and which die.
If I understand it correctly, your theory is like saying the US set such high tariffs and sanctions so Chinese companies adapt and get so strong they can eventually outcompete any US company and break free of any dependency.