Strategy, Policy, and Circular Economy in a Divided Market: BYD, NIO, and Volkswagen in the China-Europe Axis

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Abstract:

The return of protectionism has reshaped the global automotive landscape, with China emerging as the largest auto exporter while Western markets erect tariff barriers. This study examines how BYD, NIO, and Volkswagen configure corporate strategy and navigate policy frameworks in the China-Europe corridor. Drawing on strategic adaptation theory, institutional theory, and circular economy frameworks, I adopt a dual analytical lens evaluating corporate strategy and policy navigation. I find that circular economy capabilities have emerged as a critical competitive dimension and regulatory compliance tool. While Chinese firms leverage home-market scale and policy support, Western incumbents rely on legacy advantages and protectionist measures. The paper contributes new evidence on automotive value chain reconfiguration under geopolitical tension.