Analyzing the Financial Impact of Green Bond Issuance on New Energy Vehicle Companies: Insights from BAIC Automotive Group in China

Tianyu Qi ()
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Tianyu Qi: University of Nottingham

A chapter in Proceedings of the 2024 3rd International Conference on Economics, Smart Finance and Contemporary Trade (ESFCT 2024), 2024, pp 71-82 from Springer

Abstract: Abstract This study examines the financial effects of two green debts issued by BAIC and assesses their impact on new energy vehicle manufacturers. Based on the insights from analysis, this study proposes suggestions for promoting the use of green finance instruments in the Chinese NEVs market. This paper demonstrates that green bonds can reduce financing costs for automakers and positively influence investors’ expectations, as indicated by the AR and CAR figures. Despite the benefits of green bonds, BAIC experienced a decline in revenue growth during its transformation, potentially due to a lack of product superiority. The continuous issuance of the second round of green bonds further constrained the company’s cash flow and debt repayment capacity. Given the inherent risks associated with the “bond” aspect of green debt instruments, NEV enterprises should evaluate their market conditions and organizational factors before selecting a financing strategy.

Keywords: Green Bonds; Financial Performance; New Energy Vehicle (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-548-5_10

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DOI: 10.2991/978-94-6463-548-5_10

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