China Signals a Tipping Point in Its Electric Vehicle Price War
The Chinese government is indicating that the fierce competition in its electric vehicle (EV) sector may have gone too far.
Through years of supportive industrial policy, China has driven a dramatic shift toward electric mobility, making it the world’s largest auto market. But that success has also led to a crowded field of EV manufacturers—many of which are unlikely to survive. Now, long-standing concerns over market oversaturation and unsustainable price-cutting are moving into the spotlight, even as overall EV sales continue to surge.
BYD, the market leader, reported a 31% increase in vehicle sales during the first half of the year, reaching 2.1 million units. Nearly half of those were fully electric, while the remainder were plug-in hybrids, according to a filing with the Hong Kong Stock Exchange. The company fully exited gasoline-powered cars in 2022.
BYD drew criticism in late May after launching another round of price cuts, prompting other automakers to follow. Great Wall Motors’ chairman warned that the industry risks serious harm if it continues down this path.
“When volume scales up, it becomes much harder to manage—and you turn into a prime target,” said Lei Xing, an independent automotive analyst.
