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Title: China's EV Market Is Imploding

Link: https://tech.slashdot.org/story/25/11/13/1446...

An anonymous reader shares a report: 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." To bypass
government censorship of bad economic news, market analysts have opted for a
seemingly anodyne term to describe the Chinese car industry's downward
spiral: involution, which connotes falling in on oneself. What happens in
China's EV sector promises to influence the entire global automobile market.
China's emergence as the world's largest manufacturer of EVs highlights the
serious challenge the country poses to even the most advanced industries in
the U.S., Europe, and other rich economies. Given the vital role the car
industry plays in economies around the world, and the jobs, supply chains,
and technologies involved, the stakes are high. But the wobbles in China's EV
sector demonstrate the downside of China's state-led economic model. China's
government threw ample resources at the EV industry in the hopes of
leapfrogging foreign rivals in the transition to battery-powered vehicles.
The Center for Strategic and International Studies estimates that the
government provided more than $230 billion of financial assistance to the EV
sector from 2009 to 2023. The strategy worked: China's EV makers would likely
never have grown as quickly as they have without this substantial state
support. By comparison, the recent Republican-sponsored tax bill eliminated
nearly all federal subsidies for EVs in the U.S. The problem is that China's
program encouraged too much investment in the sector. Michael Dunne, the CEO
of Dunne Insights, a California-based consulting firm focused on the EV
industry, counts 46 domestic and international automakers producing EVs in
China, far too many for even the world's second-largest economy to sustain.

Read more of this story at Slashdot.

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