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  "documentTitle": "Ballard Power Systems (BLDP)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
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  "presentationDate": "2018-01-25 00:00:00",
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  "notes": "The slide uses a narrative structure to link historical regulatory changes to current financial risks for specific companies.",
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      "text": "As a result of fraud related to electric vehicle subsidies, Synergy and Broad Ocean now face much tighter requirements and longer payouts than they would have expected when partnering with Ballard in 2016.",
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      "text": "The Chinese government introduced subsidies for electric vehicles in 2014. Generous subsidies attracted investment and fraudulent activity (source)\nBy 2016 there was an investigation into fraud at 7 auto manufacturers\nFraud ranged from over-stating performance to achieve a higher subsidy, selling units to related parties but never using them, to failing to produce and faking statistics\nFrom September 2016 to February 2017 seven manufacturers were heavily fined",
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      "text": "The government is now concerned there is excess capacity in electric vehicles and has pushed out a mandated requirement for 10% of all vehicles produced to be electric vehicles to 2019",
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      "text": "As a result of the above behavior, subsidies were reduced by around 30% in 2017 (source)\nThere are now strict compliance requirements. Subsidies will only be paid once a vehicle has been registered\nWhen vehicles are sold to related party leasing fleets, subsidies will only be paid when the vehicle has been used for 30,000 km",
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      "text": "When Synergy and Broad Ocean moved into the hydrogen fuel cell market they would have expected looser requirements for subsidy payments",
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      "text": "Subsidies were historically paid with a one to two year time lag. Given stricter compliance standards, payments are likely to be pushed out further creating a larger cash flow drag on vehicle producers (Ballard purchaser chain)",
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      "text": "History of China New Energy Policy",
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