"In China, you can buy a heavily discounted "used" electric car that has never, in fact, been used. Chinese automakers, desperate to meet their sales targets in a bitterly competitive market, sell cars to dealerships, which register them as "sold," even though no actual customer has bought them. Dealers, stuck with officially sold cars, then offload them as "used," often at low prices."
"This sign of serious problems in China's electric-vehicle industry may come as a surprise to many Americans. The Chinese electric car has become a symbol of the country's seemingly unstoppable rise on the world stage. Many observers point to their growing popularity as evidence that China is winning the race to dominate new technologies. But in China, these electric cars represent something entirely different: the profound threats that Beijing's meddling in markets poses to both China and the world."
"Bloated by excessive investment, distorted by government intervention, and plagued by heavy losses, China's EV industry appears destined for a crash. EV companies are locked in a cutthroat struggle for survival. Wei Jianjun, the chairman of the Chinese automaker Great Wall Motor, warned in May that China's car industry could tumble into a financial crisis; it "just hasn't erupted yet.""
Dealers and manufacturers register unsold cars as "sold" so dealerships can later market them as "used," producing heavily discounted vehicles that were never driven. The practice has become widespread and drew criticism from the Chinese Communist Party and The People's Daily for disrupting market order and prioritizing data over reality. The EV sector is burdened by excessive investment, government intervention, and heavy losses, leaving companies in a fierce struggle for survival. Industry leaders warn of a potential financial crisis. Analysts describe the downward spiral as "involution," and stress that China's EV turmoil could reshape global automobile markets.
Read at The Atlantic
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