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At a used car market in Beijing, salesman Ma Hui said he fears China’s electric vehicle industry is in a race to the bottom. EV makers, led by the country’s market leader BYD, have been engaged in a bruising price war, depressing profits for the brands, as well as sellers such as Ma. “All of us were losing money last year,” Ma said about his fellow used car sellers in the market. “There are too many companies making too many new energy cars.” A BYD dealership in Beijing on June 4, 2025. CNBC China’s trading partners have often accused the country of flooding the global market with cheap Chinese EVs. These days, similar accusations are flying within China, raising concerns about financial stress in the industry. The official Communist Party paper, the People’s Daily, for example, published a commentary on Monday, titled “The ‘Price War’ In The Automotive Industry Leads Nowhere And Has No Future.” “Disorderly ‘price wars’ squeeze profits across the chain, impacting the entire ecosystem and risking income declines for workers,” the paper warned. “Long-term, this ‘race to the bottom’ competition is unsustainable.” BYD is drawing the most fire after it announced price cuts in late May for many of its models. Some of the discounts are as steep as 34%. Its cheapest car, the Seagull mini hatchback, now costs only about $7,700, down from about $10,000. The intense price war has led high-profile auto executives to sound the alarm — with the head of Great Wall Motor calling the industry “unhealthy.” In an interview with Chinese news outlet Sina Finance on May 23, chairman Wei Jianjun drew parallels to China’s moribund property sector and its now defunct poster child, developer Evergrande. “An ‘Evergrande-like’ crisis already exists in the automotive industry,” he said. “It just hasn’t erupted yet.”…

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Filed under: News - @ June 10, 2025 5:21 pm