There’s a bit more to it than that. But yes EVs are subsidized in China.

I worked in a business where we had one product that was useful for automakers but especially useful for EVs. About 8 years ago the EVs in China were mostly cheap shitty BYDs.

Seemingly out of nowhere, the government changed a bunch of rules and regulations for new cars. Within a month design teams were being established at every major automaker in China focusing on EVs. It was a great year for us.

Key EV components, especially the materials to make batteries, started to come down in price.

Then the green plates started turning up. Every city has its own rules for car registration, some places like Shanghai, would auction new number plates each month resulting in a low supply and high demand. It was possible to buy a car cheaper than the number plate. Then if you register an EV you can get a green plate for almost nothing.

About 3 years ago the cities started requiring new taxis and busses to be EV. Places like shenzhen just converted everything to EV. Released licenses for training and testing self driving.

Charge stations started popping up everywhere. There’s no way a shopping mall or new residential development could avoid having at least a large section for charging. My own home, converted an entire floor to charging parking stations in the underground car park.

Finally tesla set up Shanghai giga factory. I have no idea how they managed to make that deal but not long after they started shipping model 3s domestically they slashed the prices down to cheaper than a niceish BYD.

If you go to Shenzhen today about a third of cars are EV and you will see a dozen brands you’ve never heard of before (some are terrible cars, but most are reasonable quality and a handful are bullshit luxury)

As in tradition in China, the government will now let them go into a price war to push the manufacturers to find cheaper ways to make them. Many will go bust or give up.