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The Impact of Fed Rate Cuts on Long-term Investment in Emerging Market Electric Vehicles: A Case Study of BYD
- 1 International Economics and Trade, Faculty of Economics, Hefei University of Technology, Anhui Province, Hefei, 230031, China
* Author to whom correspondence should be addressed.
Abstract
In the early morning of September 19, 2024, Beijing time, the Federal Reserve issued a statement on its September interest rate meeting, cutting the target range for the federal funds rate by 50 basis points to 4.75%-5%, which is the first interest rate cut in four years. At the same time, according to the latest data from the China Association of Automobile Manufacturers (CAAM), the production and sales of new energy vehicles in China in September increased by 48.8% and 42.3% year-on-year, respectively, and new energy vehicle sales have accounted for 45.8% of the total new car sales, showing strong market growth momentum. Combining the two facts of the Fed's interest rate cut and the rapid development of new energy vehicles, this study aims to explore how the Fed's interest rate cut affects the long-term supply chain investment decision of new energy vehicles in emerging markets. Through theoretical analysis and case studies, this paper concludes that the Fed's interest rate cut can reduce the cost of financing, thereby facilitating the decision-making of the new energy vehicle industry to make long-term supply chain investments in emerging markets.
Keywords
Federal Reserve, New Energy Vehicles, Emerging Markets, Investment decision
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Cite this article
Zheng,M. (2025). The Impact of Fed Rate Cuts on Long-term Investment in Emerging Market Electric Vehicles: A Case Study of BYD. Advances in Economics, Management and Political Sciences,165,1-6.
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