Research On The Financing Strategy Of BYD Under The Background Of Declining Subsidies In The New Energy Vehicle Industry

As the new energy vehicle industry subsidy the decline of subsidies policy in this industry began to gradually advance.As early as 2013,subsidies for the new energy vehicle industry have shown a trend of decline,but it was in 2015 that the policy of decline was publicly clear,followed by a significant decline in subsidies for the new energy vehicle industry.Subsidies for new energy vehicles,which were scheduled to be withdrawn in 2020,will be extended to the end of 2022 due to the impact of COVID-19.It is expected that in 2022,China’s new energy vehicle industry will step into the "post-subsidy" era.With the decline of subsidies in the new energy vehicle industry,the profits of new energy vehicle enterprises have been affected without exception.In the face of the business capital demand for the continued development of new energy vehicles,it is not enough to rely on the retained earnings of enterprises.In order to obtain sufficient funds,other financing means are needed.Therefore,how to choose an appropriate financing strategy to solve the problem of funds needed for enterprise development has become an urgent problem for new energy vehicle enterprises.This paper takes BYD,a leading new energy vehicle enterprise that has benefited a lot from the subsidy policy of the new energy automobile industry,as a case study,and the research time interval is from 2015 to 2020,during which the subsidy policy of new energy vehicle industry is relatively mature and obvious decline.This study summarizes the financing situation of BYD from the perspectives of endogenous financing and external financing,and obtains its economic added value through by indicators such as BYD’s net profit after tax,total capital and weighted average cost of capital,so as to judge the profitability of the enterprise.Based on the data of BYD’s sales net profit,total asset turnover,equity multiplier,retained yield,ratio of new stock issuance to initial owner’s equity,sustainable growth rate and real growth rate,the capital demand of the enterprise is analyzed,so as to judge the sustainable development of the enterprise.Finally,the EVA/SGR matrix is constructed,and the financing strategy of BYD is compared and analyzed under the background of subsidy decline in the new energy automobile industry,so the advantages and disadvantages of its financing strategy can be found.Through the classification of BYD’s financing strategies,this paper concludes that BYD’s financing strategies are unreasonable,and its endogenous financing capabilities are strong,but it is too dependent on industry subsidies,and the proportion of shortterm borrowings and capital chain risks are high,therefore,external financing is uneven.In view of BYD’s financing problems,suggestions for improvement are put forward,which provide reference for other new energy vehicle enterprises to solve financing problems under the background of subsidy decline,and provide suggestions for government policy formulation.