Evaluating the effect of new energy vehicle subsidy policies on automakers’ R&D Investment based on a difference-in-differences model

This study focuses on BYD and explores the policy effect of government subsidies on the R&D investment of new energy vehicle manufacturers. In the face of environmental and industrial transformation challenges, fiscal subsidies are an important driving force for technological innovation. This paper believes that subsidies influence enterprise R&D through direct incentives and signaling effects. Using the difference-in-differences method (DID), BYD is set as the experimental group and Geely Automobile as the control group for empirical testing. The results show that government subsidies significantly increased BYD’s R&D investment intensity, and the effect was more prominent for enterprises focusing on pure electric lines; the subsidy effect is persistent (path dependence), and its incentive effect strengthens over time. Based on the robust results, it is suggested that policies should focus on sustainability, implement differentiated incentives based on different technological routes, and strengthen the assessment of the correlation between subsidy intensity and R&D output efficiency, in order to provide decision-making basis for in-depth understanding of the mechanism of public policies promoting sustainable innovation and scientifically designing future industrial subsidy policies.