Supply Chain Structure and the Rise of China's Electric Vehicle Industry

Speaker: Weiting Miao, Postdoctoral Scholar, Environmental Social Sciences, Stanford Doerr School of Sustainability

China has emerged as the global leader in electric vehicles (EVs), with a substantial price advantage relative to other major economies. This research studies how the density and geographic proximity of the supply chain contribute to this advantage. Using transaction-level buyer–seller data from the Chinese auto industry, we show that supplier proximity increases matching probability and that greater input market thickness lowers input prices. Exploiting policy exposure as an instrument, we further document that shorter buyer–supplier distance reduces prices while improving quality. Motivated by these findings, we develop and estimate a structural model that integrates upstream matching and pricing with downstream competition under heterogeneous consumer demand. The model quantifies how alternative market structures affect equilibrium outcomes. When we adjust China’s supply chain and product structure to match the 2018 US market, EV parts costs increase by about 60%, final vehicle prices rise by roughly 50%, and sales decline by 57%.

About the Workshops

Our Young Researcher Workshops offer emerging China scholars an opportunity to engage directly with interdisciplinary faculty and peers from across campus to discuss and receive feedback on their research. Each workshop features one or several PhD students presenting their latest empirical findings on issues related to China’s economy. Past topics have included college major selection as an obstacle to socioeconomic mobility, the effect of a cooling-off period on marriage outcomes, and factors contributing to government corruption. Faculty and senior scholars provide comments and feedback for improvement. This event series helps to build and strengthen Stanford’s community of young researchers working on China.

Workshops are held on select Fridays from 12 - 1 pm. Lunch will be provided! 

Visit the Young Researcher Workshops webpage for more information on the content and format of the series and to learn how to sign up to present.