Discussion On The Legality Of Electric Vehicle Subsidies

In the background of the current deteriorating environment and energy situation,the role of electric vehicles in environmental protection is prominent,and the development of electric vehicles has become a trend.However,because of their own disadvantages such as high prices and low market adoption,many countries subsidize electric vehicles to reduce their prices,in order to increase their public adoption and achieve environmental protection purposes.These subsidies are to provide financial support for the research and innovation in the field of electric vehicles,provide price support for purchase,allow electric vehicles to have various tax reductions,provide low-interest loans or discount funds to electric vehicle manufactures,increase government purchasing electric vehicles,and to improve the infrastructure of electric vehicles.However,subsidies have created more advantages for electric automobile companies than other companies.These advantages may have consequences that harm market order due to government intervention.Therefore,this article focuses on these subsidies from the perspective of law hermeneutics and law economics to analyze whether they are truly legal.In terms of legal hermeneutics,two aspects of the international trade order and competition order that electric vehicle subsidies may affect are selected,and their legitimacy is analyzed from the perspective of WTO rules and competition law.In terms of WTO rules,this thesis first define what kind of government support for electric vehicles are subsidies under the WTO rules,and then analyze the legality of these subsidies under the WTO framework.The legality analysis is in two steps.The first step is to analyze whether the subsidy for electric vehicles conforms to WTO rules.Because the "non-actionable subsidy" clause exempting environmental subsidies in the WTO rules has expired,electric vehicle subsidies,as one of the forms of environmental subsidies,have also lost the legal basis in the rules.Therefore,in practice,the provisions of Article 20(b)and(g)of GATT on protecting human beings and possible depleted natural resources are often used to replace the invalid “non-actionable subsidy” clauses to explain the legality of environmental subsidies.Therefore,this article analyzes whether the electric vehicle subsidy meets the constitutional requirements of Article 20(b)and(c)of the GATT to judge its legitimacy.The second step is to judge the legality of different types of electric vehicle subsidies.In terms of competition law,because competition law protects the market competition order,this order is mainly regulated by the market.Improper government intervention may damage the market competition order,so this part first analyzes whether the government interferes in the new energy vehicle market through subsidies.Then discuss the distortion of the market order that may be caused by the subsidies of electric vehicles in the general automotive market and the new energy vehicle market.In the general automobile market,European Union 's state aid regulations restrict state aid that may cause competition distortions.With the help of the elements of the state aid regulations it is analyzed whether subsidies for electric vehicles will damage the order of the automobile market.It was concluded that due to its own disadvantages,electric vehicle subsidies could not obtain the same competitive conditions as traditional cars in the automobile market.Subsidizing electric vehicles do not create unequal competitive advantages for electric vehicles and distort the competitive order of the automotive market.In the electric vehicle market,due to the local protection of the local government,certain government subsidies flow to specific local enterprises,which constitutes a monopolistic act of abusing administrative power,excluding and restricting market competition.To summarize up,in the formulation and implementation of subsidy policies,there are illegal situations that violate WTO rules and competition laws.In terms of law economics,this article first explains the reasons for using the cost-benefit standard to analyze the subsidies for electric vehicles,because by comparing the subsidy costs and subsidy benefits of electric vehicles in all aspects of society,it can be judged whether the entire society benefits or suffer a loss.If the cost of subsidies is higher than the benefits of subsidies,it means that the overall interests of the society are damaged,and the subsidies for electric vehicles will not be legal because they harm the interests of society.However,the cost-benefit analysis method compares the total cost and benefit of the society as a whole,and cannot reflect the benefits and losses of the individual.When the society obtain benefits in general,an individual may suffer losses.The cost-benefit analysis only cannot truly reflect fairness.distribution.Therefore,this thesis combines the cost-benefit analysis method with the distribution fair standard to analyze the specific aspects of the electric vehicle subsidy methods,amount,and process etc.It draws a conclusion that the cost of the electric vehicle subsidy policy is higher than the revenue,so it is not legal.Finally,for the specific aspects that lead to the high cost of electric vehicle subsidies and low benefits,relevant solutions are proposed to avoid illegal factors that damage the overall interests of society because the cost of subsidies is higher than the benefits.