BYD under scrutiny: subsidies and unsold cars raise fraud questions

BYD: fraud or national champion? The controversy dividing the industry

A battery maker becoming the world's largest seller of electric cars should be good news for the Western industry. For some analysts, it is proof of a huge deception.

The educational channel Los Economos has released a video titled "BYD: the biggest fraud in the car industry" denouncing practices that, according to the analysis itself, Tesla also engages in. The main one: cars piling up in open-air lots without selling, a cosmetic cover-up of real demand.

Subsidies for national champions

Some argue that BYD is a strategic company that deserves state support until it prevails globally, just like Palantir in the data sector, which racked up losses for years before establishing itself. This line of thinking compares Chinese state capitalism with the US military-industrial complex and concludes that both models use tricks and subsidies to gain strategic positions.

The flaws in the analysis

Criticism of the video was not long in coming. It is accused of oversimplifying: its analysis of gold ignores factors such as Basel regulations, tier 1 status, the role of the BRICS or sanctions on the Swift system. On housing, it ignores Singapore's model and blames everything on the boomer generation. If the BYD video suffers from the same carelessness, its conclusions should be taken with caution. The full breakdown of the practices attributed to Tesla and BYD, with the figures, is in the original video.

Meanwhile, the question remains open: if BYD is the car industry's biggest fraud or the most successful example of state capitalism, why haven't traditional manufacturers reacted? The lots full of unsold cars may hold the answer.