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Trapped in the fast lane: The ‘neijuan’ crisis plaguing China’s EV industry
Oversupply and price wars are driving Chinese companies to try to outdo one another in a downward spiral, and a major shake-up is inevitable.
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BYD’s latest pricing strategy has cost it more than US$20 billion in market value drop.
PHOTO: AFP
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When Chinese car giant BYD recently slashed prices by as much as 34 per cent in its domestic market, it predictably triggered a cascade of similar cuts from major rivals like Geely and Chery.
It wouldn’t be the first time that China’s electric vehicle (EV) manufacturers tried to outdo one another by undercutting to offload stock and hold on to market share. Such hyper competition has been a feature of the EV sector since around 2018, driven by factors like massive government subsidies, rapid technological advancements, and a flood of new players into the market.
