The end product of China’s efforts has been EVs that are on par with their foreign competitors’ performance, but at substantially — and artificially — lower costs. BYD’s Atto 3 sells for €38,000 in Germany, making it 10-20% cheaper than VW’s similar all-electric ID.4. The combination of a massive and protected domestic market, generous incentives including a credit system that allows automakers to sell vehicles below cost, and localized supply chains give PRC firms a leg up in the competition - a key hurdle for incumbent carmakers. At the end of the day, building its competitiveness in EVs also serves Beijing’s strategic goals of creating a strong export market, while reducing its dependence on foreign automakers