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China Transportation

China's EV Market Is Imploding (theatlantic.com) 207

An anonymous reader quotes a report from The Atlantic: 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. The practice has become so prevalent that the Chinese Communist Party is trying to stop it. Its main newspaper, The People's Daily, complained earlier this year that this sales-inflating tactic "disrupts normal market order," and criticized companies for their "data worship."

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." 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.

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China's EV Market Is Imploding

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  • Exported deflation (Score:5, Insightful)

    by dknj ( 441802 ) on Tuesday November 11, 2025 @10:42PM (#65789368) Journal

    It wonâ(TM)t take long for these cars to be exported. When it does, expect them to absolutely destroy the automotive markets of whatever country allows them in

    • by caseih ( 160668 ) on Tuesday November 11, 2025 @10:56PM (#65789394)

      Maybe. Here in North America, the big three have already conceded the budget market. None of them are interested in anything other than luxury cars. For the first time, the average car purchase in the US has hit $50k. Europe ceded the entire EV market years ago to China.

      Canada is set to relax the Chinese EV ban and tariffs, which I'm in favor of (maybe set them to 50%). However the only Chinese EV manufacturer that will actually be allowed in is Tesla. Our market is just too small to for Chinese automakers to justify complying with our North American standards when the US will never ever allow them in. On the other hand if we allowed cars meeting European standards in, that would open the door to a ton of Chinese vehicles coming here.

      Meanwhile the fetish with touch screens and always-on internet connections is a real hangup of mine for EVs. That and how every charging station wants you to use a crummy app, instead of just being like a gas station.

      • by protehnica ( 10187841 ) on Wednesday November 12, 2025 @01:45AM (#65789578)

        "Europe ceded the entire EV market years ago to China."

        Factually incorrect. This would imply that all/most new EV cars on the roads in Europe are Chinese brands, which is simply not the case.

        • by Sique ( 173459 ) on Wednesday November 12, 2025 @02:20AM (#65789618) Homepage
          Or to bolster it, in 2024, the market share of Chinese made cars in BEV sales in the E.U. was 20%, and that of Chinese automakers 8%, with a total of 438,034 BEVs imported from China. Source [acea.auto]
        • Middle-class European here.

          Just wait a few years. I'm in the position that I simply can't affort a new car, prices well above $50k, so I'm stuck with whatever I can get on the 2nd hand market at 20k-ish. We're already seeing the Xpeng P7 here occasionally at 35k-ish ("used" but factually new). That's whay I'm eyeing with.

          If most of middle class here is like me (and I can't imagine they're not, I'm simply too good at math to entertain any other illusion), and their internal combustion cars are aging just lil

          • Prices are far lower than that unless you insist on a car that is way too large for European streets, which is, unfortunately, fashionable nowadays.

            • I don't care what you think is "fashionable" or adequate "for European streets". I was looking for cars suitable for my typical family life, and the smalles one thst fits the bill is Tesla's Model 3. Which cost around 60k-ish in a reasonable version, and os pretty much the cheapest.

              No, I won't buy a Dacia Spring whoch isn't even large enough for me in the driver's sear and a case of beer in the trunk, let alone for a family holiday trip across the Alps.

              • by higuita ( 129722 )

                you are lying, it is still fashion, you are just justifying to yourself some excused to buy a tesla!
                for your requirements you still have EV sedan cars lower than the tesla value, both chinese and other countries, being the Hyundai Ioniq 6 the best example and still cheaper than the tesla.

                if you open to hybrid, you get lot more deals with lower price and hybrid-plugin is still cheaper:
                https://www.caranddriver.com/r... [caranddriver.com]

                but yes, a car for the family to travel far with luggage isn't much in the scope of EVs, th

              • Maybe lose some weight then? Because if you don't fit in one of these you must weigh about 200 kilos.

          • by shilly ( 142940 ) on Wednesday November 12, 2025 @03:13AM (#65789674)

            A Renault 5, Dacia Spring, e208, Inster, and literally dozens of other EVs are available for way, way less than $50k.

          • by test321 ( 8891681 ) on Wednesday November 12, 2025 @04:12AM (#65789742)

            The Renault 5 BEV is entirely made in France including the batteries, and sold 24.990 €. The Dacia Spring, also produced by Renault in their Chinese factory, is sold 16.900 €. The Chinese makers do have a great opportunity, but I just wanted to make the point that EU-made BEV are not necessarily > 50 k€.

            • Is the price quoted with or without any government subsidies for electric vehicles?
              • Why is that relevant to the buyer? I don't really care why my car costs what it costs - I just care about how much I'm putting out of my pocket.
          • Also for those who want an ICE, Dacia Sandero made by Renault in Romania (and Morocco), is sold 12.490 €. It is currently the best selling vehicle in Europe right now, with about 400.000 sold per year and about 4% of the total market share. The second most sold is the Renault Clio, which starts at 21.450 €.

            To highlight that middle-class Europeans find cars in the 20-30 k€ range.

          • Colleague of mine bought a young 2nd hand VW EV (ID 5 if I remember well), in Luxembourg from a VW dealer and drove it to his home in Belgium. Very nice car, and it was priced very attractively. Looks big enough inside for you and your family. Similarly spacious as my Y.
          • We're already seeing the Xpeng P7 here occasionally at 35k-ish ("used" but factually new). That's whay I'm eyeing with.

            Be very, VERY careful here. I've heard credible reports that MANY of these "excess" cars from China are made with inferior quality control and materials - including the batteries themselves, which is the WORST place for cost-cutting - because the manufacturers know that the cars are probably going to end up rotting in vast fields with truly gob-smacking numbers of other cars.

            I'm not against Chinese cars per se; but some of the EVs that were produced to scam the Chinese government out of subsidies are such b

            • So... you think European cars are kosher?

              *cough*Dieselgate*cough*?

              And let's not even talk that I've had the motor on my VW T5 replaced twice before its 200,000 km mark, for broken transmission chain. And large parts of its drivetrain once.

              And that I've had the transmission chain on a 325 BMW replaced at 50,000 km. And then the motor replaced ar 65,000 km for problems with its connecting rod.

              And that I'm essentially about to have to replace injection valves on two BMWs before their 200,000 mark.

              And the only

      • Dunno about the rest of Europe, but here Kia sells more EVs than the Chinese brands put together. Also Skoda Elroq (VW group) will likely be the best selling EV of this year.

      • Maybe. Here in North America, the big three have already conceded the budget market. None of them are interested in anything other than luxury cars. For the first time, the average car purchase in the US has hit $50k.

        Forget 2026. The big three look like they’re still struggling to sell last year models off the lot. As every new car lot can attest.

        Not sure what the big three conceded to sell in North America, but it ain’t cars at $50K+.

      • It's sad that touchscreens and mandatory internet are becoming standard even in ICE vehicles, but... THIS right here...

        That and how every charging station wants you to use a crummy app, instead of just being like a gas station.

        Now THIS is probably the biggest reason why EV sales are so slow here in the USA. I was genuinely shocked the first time I checked out a charging station and realized how complicated the procedure is. A gas station could never get away with that. The very culture behind anything "electric" or "high-tech" is just poison. If this doesn't change, I will never trade in my 11-year-old WRX fo

        • I could see a lowish range bev for a second car, as long as I can charge at home. If I can eventually get one cheaply enough.

        • That is one reason why Tesla is so popular. It has the best charging network around, and all the other manufacturers in North America are jumping on that bandwagon as well. You just plug in and charge. No card, no app needed.
      • Maybe. Here in North America, the big three have already conceded the budget market. None of them are interested in anything other than luxury cars. For the first time, the average car purchase in the US has hit $50k.

        Citation needed. Your $50k figure is fine but that just shows an increasing price level, it doesn't mean the cars are any more luxury than they were before.

        Here's one site that lists (among other things) quarterly sales figures by model. I don't see the top 50 being dominated by luxury cars, foreign or domestic.

        https://www.goodcarbadcar.net/... [goodcarbadcar.net]

        I wish they could filter that list to EVs only.

        According to USNews the bestselling EVs do tend to be SUVs but not necessarily luxury. As is true of ICE vehicle sal

      • The US automotive market has long been protected by our government. It has warped not just the big three, but it makes importing light pickups impractical (chicken tax). The margins on an affordable compact car that can still pass safety tests are very thin now. The money is, as GM discovered half a century ago, in financing cars people cannot realistically afford.

    • by drnb ( 2434720 )

      It wonâ(TM)t take long for these cars to be exported.

      Assuming they are exportable. Things designed for the domestic market can have safety, IP infringement, and other problems if one tries to export them.

      • While that's almost certainly true for the existing stock of vehicles, they have also overbuilt production capacity. So they could easily retool to deliver for another market while selling the existing inventory slowly to domestic buyers.

      • by cusco ( 717999 )

        The US/EU are not the entire world, just the most profitable portion of it. As Belt & Road improves electrical infrastructure throughout the Third World those countries will be snapping up anything that comes in at a reasonable price point.

        • This was (is) a significant part of the reason for the Belt & Road initiative -to create foreign markets for Chinese goods. The other part was to create indebtedness of foreign governments to China -with all the advantages that come from having other nations owe you more than they can reasonably pay off.

          It is a massive exercise of soft power. Well planned and executed.

    • If country has no EV industry then this is a good thing...

      Nothing is destroyed - just enjoying lower prices...

  • and the effects of that implosion will ripple across the world

  • cool! (Score:4, Interesting)

    by Morromist ( 1207276 ) on Tuesday November 11, 2025 @10:49PM (#65789378)

    In China they have an oversupply of vehicles
    In the Us we have more demand than supply.

    Should be easy to solve these problems. Except wait, no, we won't buy chinese cars because we want to prop up the richest dude in the world and the cars he's trying to sell us, despite the cars being outdated, 3-5x more expensive than the chinese cars, and built on a heap of lies - like full self driving supposed to be available in like 2016.

    • by caseih ( 160668 )

      Never mind that their FSD is more capable than any current system on the market today. Unless you've ridden in a Tesla with FSD activated and witnessed the problems first-hand I'm not sure you are qualified to speak to how bad it is. The "8-bit guy" did a random off-his-normal-topic video recently about FSD and it was eye openingly good.

      My issues with FSD have more to do with the fact you don't own the car really, and you are constantly beta testing it for them. But it's remarkable how well it does work.

      I

      • by caseih ( 160668 )

        make that comma.ai. sigh. No AI assisting me here tonight. Or spell checker apparently.

    • Chinese people don't want to buy their garbage cars and they like China. Why would we?
    • The US also has an oversupply of EV (at least a certain type of EV). Musk had to make his other companies buy surplus cybertrucks [electrek.co] to make Telsa's bottom line look better. I guess Chinese and American carmakers aren't that different after all.

  • Wishful Thinking (Score:5, Interesting)

    by RossCWilliams ( 5513152 ) on Tuesday November 11, 2025 @10:50PM (#65789384)
    This is wishful thinking for the Atlantic's elite American audience. If the reality is that China is producing more cars than they can sell, that does not lead to a crash. It leads to them exporting more cars. EV's are a growing market in the world that will eventually have a demand for all that production capacity. Individual companies may fail, but their production assets will be picked up by someone else. If you are looking to invest in a Chinese EV producer you should be cautious. If not, its basically irrelevant to anyone other than the Chinese companies and their workers.
    • If the reality is that China is producing more cars than they can sell, that does not lead to a crash. It leads to them exporting more cars. EV's are a growing market in the world that will eventually have a demand for all that production capacity.

      You are assuming these cars are exportable. Things designed for the domestic market can have safety, IP infringement, and other problems if one tries to export them.

      You will find these cars at Chinese run worksites around the globe. But that'll just be gov't policy, not some sort of actual demand at these sites.

    • By the same token, I was reading for years how China's construction market was the biggest bubble in history and was going to pop so hard the nation would be an economic black hole. Is that still going to happen or what?
    • by thsths ( 31372 )

      Exactly. I would expect better from the Atlantic, but here we are.

      This is part of the plan. China has built up a huge EV industry in 18 years, a vast, diverse, vibrant, and innovate ecosystem and supply chain.

      Now it needs to be trimmed down. The government has said repeatedly that there are too many EV companies, and they want only the best to survive.

      So there will be a market concentration. Mergers, acquisitions, and bankruptcies are to be expected. The result will be a stronger industry with better qualit

      • by shilly ( 142940 )

        Not merely "one of". The preeminent EV producing region. Europe is doing OK, Korea is doing well, Japan is way behind, and the US is going into a mad tailspin. China is ahead and will stay that way.

      • Far from the death nail in the industry...

        Understandable phrasing (like "nail in the coffin"), but I think you were going for "death knell".

        Death knell - the tolling of a bell to mark someone's death.

    • by shilly ( 142940 )

      This is absolutely spot on. It's a shitty take from the Atlantic on a story that has been around for at least five years: the aggressive competition of the Chinese EV market, which is going to see some company failures in the years ahead. As opposed to the American way of bail outs. The notion that there is falling demand for Chinese EVs is absolutely a little lullaby that complacent US rich guys like to sing to themselves, but it bears no resemblance to the truth.

    • by AmiMoJo ( 196126 )

      Indeed, lack of production has been a limiting factor in their exports so far.

      Also the practice of pre-registering cars is commonplace in Europe. The dealer buys the car from themselves, registers it to themselves, and sells it "second hand" to the customer with only delivery miles on the clock. My current car was supposed to be like that, but they just registered it to me so it was brand new, but for the pre-registered price.

    • Not, it's not: the first to talk about this oversupply was the Chinese GWM manufacturer, talking explicitly about a crash of several makers on Chinese market, like the building sector.
  • by OzJimbob ( 129746 ) on Tuesday November 11, 2025 @11:05PM (#65789404) Homepage

    Of course, American car makers would never be subject to this kind of government intervention, investment or market distortion, nor car dealers playing with numbers or being dishonest. Clearly this is just a Communist Chinese thing.

    • Re:Of course... (Score:5, Interesting)

      by drinkypoo ( 153816 ) <drink@hyperlogos.org> on Wednesday November 12, 2025 @08:28AM (#65789954) Homepage Journal

      Of course, American car makers would never be subject to this kind of government intervention, investment or market distortion

      In the US it primarily works the other way around, the automakers intervene in the government by having their lawyers write legislation and then paying congresscreeps to sponsor it. That's how we got the regulatory landscape we have with e.g. the chicken tax, and the differing standards for light trucks.

      Government intervention in the USA is kind to the big 3 automakers and primarily fucks over consumers, like how California is now making owners of heavy diesel RVs get smog tests every year even though their contribution to emissions is barely measurable. It costs each owner $250 to get the test and another $35 or so in filing fees to accomplish... fuck all. Plus it creates an additional trip which starts with idling for at least fifteen minutes (or up to half an hour, depending on the ambient temperature) so the wet sleeved diesel engine can come up to temp before I set off. My neighbors must really enjoy that. Also then there's the fact that DPFs reduce soot but a) increase the production of PM2.5 soot and b) increase CO2 emissions. DEF+SCR good (except that the DEF injection systems are typically pathetically fragile) but DPF is bad but still mandated.

  • ...order to induce R&D, but the side effect is a glut of cars and mass collapsing of brands. Chinese citizens got dicked by a tator, who treats them like guinea pigs.

    • Chinese citizens get cheap cars funded by government R&D money.

      Who's been dicked here?
      The car companies take government money and build cars
      The car dealers buy them real cheap and sell at a profit
      The consumers get cheap cars

      The only ones "losing" money are the government. But they're just printing it. And building a massive manufacturing industry with development capability as well. Selling on a global market to everyone else at prices no one else can compete with.

      • Who's been dicked here?

        The government. That's why they are complaining (according to the summary).

    • And that isn't the only over-subsidized market in China.

    • These factories are not over-subsidized.

      These is prime industrial capacity for military drones production.

      China currently has now probably more potential military drones capacity than rest of the world combined...

  • These people don't seem to understand that China is not capitalist.

    The Government won't allow it. They'll fund failing companies, write off debts, what every they want to keep things going.
    All of these companies have Government representatives on their boards. A large number are partially Government owned.

    • by shilly ( 142940 ) on Wednesday November 12, 2025 @05:35AM (#65789828)

      Are you fucking kidding?

      Tell me this: which government has actually funded bailouts of car companies repeatedly over the past 40 years: the Chinese or the US? The Chinese government has been clear for years that it wants a thriving EV sector and that requires consolidation in the coming years.

      The projection is just off the charts.

      It is the *US* auto industry that has been propped up forever by the US government, including fighting literal wars to keep the gas flowing.

  • I think the Chinese government needs to severely cull the number of EV manufacturers down to four at most: BYD, SAIC, Geely Group and Chery. And give them unlimited resources to make their EV's truly world-class vehicles that comply even with the US Federal Motor Vehicle Safety Standards.

    • Re: (Score:2, Insightful)

      by Anonymous Coward
      Plenty already comply with the better European standards. They don't bother certifying for the US because the US just keeps changing the rules as a form of protectionism.
  • US dealers do it too (Score:5, Informative)

    by misnohmer ( 1636461 ) on Wednesday November 12, 2025 @01:35AM (#65789570)
    I've seen US dealers do it with ICE and EV cars. Sometimes they put light mileage on those cars as service loaners (which they can bill to the manufacturer if it's for a customer repair under warranty), or a car that higher level staff drive for a bit. Then they sell them as lightly used demo cars, with warranty started few months earlier (which is sometimes offset by CPO warranty). They do it to meet quotas to the manufacturer, so they get more car allocations the following year, and/or more allocations for exclusive models which can be sold over MSRP, or dealer requires the customer to buy a few "regular" cars before being given a chance to buy the exclusive one.
    • by Luckyo ( 1726890 )

      You're describing a completely different system.

    • by Viol8 ( 599362 )

      When Chrysler went bust back in the 2000s I picked up a half price 300c here in europe that had been sitting in a dealership for a year and only had delivery miles on it. I kept that car for 15 years, best I've ever owned.

    • by MTEK ( 2826397 )

      They do it to meet quotas to the manufacturer, so they get more car allocations the following year, and/or more allocations for exclusive models which can be sold over MSRP, or dealer requires the customer to buy a few "regular" cars before being given a chance to buy the exclusive one.

      Yeah, and that's how Porsche is pissing off its brand loyalists. They think they're Ferrari. Which, btw, I will never understand how very wealthy people can have so little self-respect to be treated this way.

  • This overcapacity of EV factories can be easily repurposed into military drones factories.

  • So someone marks an expensive car as sold and then sells it as used. Didn't they make a loss then?

  • Electric vehicles are a great idea, and battery technology is catching up to market expectations. However, trying to force everyone into an electric vehicle earlier than they can afford or they want is a recipe for disaster. Put the money into technology research and stop trying to force the issue at the government level.

  • I'm sure someone will post a long reply about how this is still somehow good for China, and bad for the West. Don't forget to mention The Donald!
  • This isn't strictly an American thing, it's everywhere.

    Big Petrol don't want you to get an 10K$ EV, to them this is their No#1 enemy, they want to sell you petrol, their entire infrastructure is built around it, and they will fight to the very death over it, just like Old-media fought a losing battle to get people to stick to printed media. The always refused, time took it's course and they never recovered from it.

    Same with EV's.

    Yes, there's entire car lots (huge fields) of unsold EV's in China, there were

  • US auto manufacturers count a car as sold when it is delivered to a dealer.
    Currently there is a glut of new cars and dealers are sending them to auctions as used.
    The US economy is going down the tubes and taking autos with it.

  • China is a planned economy, not a market economy. I read a report from an analyst of China that the CCP's plan was to pump up the EV market with dozens of manufacturers and then strategically collapse it, resulting in concentration of technologies in two or three manufacturers. This just looks like China following that plan to me. It's a matter of leveraging markets' tendency to over-produce, over-saturate, and follow boom & bust cycles to end up with a stable but varied market on the other end while ul

  • In days of yore Wang computers got a monumental boost due to the company name. America needs a Wang (EV).

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