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Chinese Electric Car Market Overcrowded

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Overcapacity has been a persistent concern for many Chinese industries, with thousands of firms, backed by growth-hungry local governments and supported by risky loans, expanding quickly. Over the years, China has been forced to take action against price-sapping supply gluts in steel, coal and solar panels, among others.

Electric vehicles could be next, as local governments feel pressure to create champions while following state instructions to “upgrade” their heavy industrial economies. Some executives say the market is already distorted by subsidies granted to inefficient and poorly performing firms.

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There are tons of firms working in this market but smaller ones really lean heavily on subsidies to exist. The direction of the Chinese EV program is great, but it won't last forever. It's a business. Make a profit or disappear. 

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1 hour ago, Adam Varga said:

There are tons of firms working in this market but smaller ones really lean heavily on subsidies to exist. The direction of the Chinese EV program is great, but it won't last forever. It's a business. Make a profit or disappear. 

I totally agree. New tech's need help to break into the established markets, that keeps healthy capitalism going and not stagnating. There will be a thinning out of EV companies in China, some going under others been brought out. In the end the most competitive companies with the best tech will win through. China is rapidly growing and in some ways is beginning to pass the west and it's the wests fault for stagnating.

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