China's EV Market Is Eating Its Own Tail

"While China's EV industry looks like an unstoppable and ever-growing juggernaut, there are deep issues bubbling below the surface. Sure, the country's automakers are building a colossal number of very good and very well priced vehicles that are winning over buyers abroad. But these cars are also piling up at dealerships because of overproduction that far exceeds the real demand."

"There definitely is appetite for EVs in China, but it's nowhere near enough to find homes for all the cars being produced. As a result, some local manufacturers are bleeding cash and trying all sorts of shady tactics to get rid of their unsold inventory, like selling zero-mile used cars abroad or just letting them rot in mass car graveyards, highlighted in a deep-dive report on the issue."

"The outlet found that you can buy a brand new locally-manufactured Audi vehicle for 50% off, or a car made by FAW for 60% off its intended list price. There's a company called Zcar that's buying these unsold cars in bulk and selling them at huge discounts. You can even buy brand new, heavily discounted cars in TikTok livestream fire sales in China, the outlet notes."

China produces electric vehicles at a rate far exceeding domestic demand, creating large unsold inventories at dealerships and mass car graveyards. Intense competition and years of subsidies have encouraged automakers to meet production quotas despite weak sales, prompting price cuts, bulk resale of 'zero-mile' vehicles, and livestream fire sales. Some manufacturers are losing cash and relying on government support tied to production. Excess capacity now far surpasses current production, fueling a sustained price war that threatens industry consolidation and the survival of weaker automakers. Analysts project only a fraction of plug-in vehicle makers will survive without restructuring.

Read at InsideEVs