Research On The Impact Of Government Subsidies To China’s New Energy Auto Enterprises’ Performance

With the decreasing of the subsidy quota,the development of the new energy automobile industry is shifting from the policy-driven stage to the market-driven stage.In the transition phase,the industry still faces many problems.The government subsidies recession will accelerate the survival of the enterprises,and the competition will be more intense.Based on this background,the importance of research on the impact of subsidies is enough to highlight that new energy automobile enterprises should respond to the decreasing of the subsidy quota and promote the healthy development of the industry.After conducting a basic industry background learning,first of all,this article explores the impact of government subsidies on the financial performance,R&D performance and market performance of new energy vehicle enterprises.Then,this article selects BYD enterprise as the research object,and explores the impact of subsidies on the financial performance and market performance of BYD enterprise.Finally,based on the results of the study,this article summarized the targeted measures,which is helpful to provide reference for policy makers and implementers,and help the new energy auto enterprises to use government subsidies efficiently.This article draw the following conclusions:(1)The government subsidies beautify BYD’s profits,affect operating income,and improve the profitability.(2)Because the large amount of new energy automobile subsidies receivable is uncertainty,although the receivable increases BYD’s assets,actually it worsens the cash flow,which allows BYD to keep borrowing on a rolling basis,increasing interest payments and reducing solvency.(3)Diversification has allowed BYD to expand its assets,in spite of the large subsidies,it is dwarfed by the annual cash outflows used to buy and build assets.That’s why BYD’s solvency is so much lower.But the government,through subsidies and working with BYD,has helped BYD put on a government approved label,giving it more resources and opportunities.(4)R&D subsidies increase the number of R&D inputs and outputs og BYD,it has a positive effect on innovation performance.(5)Under the stable policy,BYD will take the initiative to deal with the policy,which will ease the market’s fluctuation,and the market will even have a positive response;however,the subsidy policy will be implemented ahead of schedule,it means that the company’s future revenue and earnings will be lost.