China's EV Price War Was Built On Cars Sold At a Loss (autoblog.com) 231
Longtime Slashdot reader schwit1 shares a report from Autoblog: For years, the Chinese auto industry has employed a hostile price war to kneecap global competitors. Armed with massive state subsidies, cheap raw materials, and an aggressive "scale-first" business model, Chinese automakers flooded the market with electric vehicles priced so low that legacy manufacturers stood no chance to compete. How did they do it? Simple, they couldn't. They did it anyway. Reports from CarNewsChina show that Chinese automakers have been selling vehicles at a loss until a recent law passed by the Chinese government banned below-cost sales of new vehicles. During the ongoing sales slump in China caused by rolled-back subsidies and direct government intervention banning below-cost sales, the truth behind the rapid expansion of the Chinese auto industry has been exposed. "By the first quarter of 2026, China captured 32 percent of the global auto market, with its New Energy Vehicles (NEVs) controlling an incredible 61 percent of global share," the report notes. Yet that dominance has come at a steep cost: throughout 2025, "the profit margin for China's auto industry plunged to 4.4 percent and dropped further to a historic low of 3.2 percent in early 2026."
"Gross profit, not net profit, per vehicle, plummeted to a mere $2,000. We can expect the net figure to be loss-making." Autoblog adds: "Data shows over 70 percent of Chinese car sales were loss-making. This left more than half of the country's auto industry in the red. Great Wall Motor (GWM) even saw net profits drop 17 percent despite steady revenue growth."
China's EV price war has now hit a wall. New regulations are discouraging below-cost sales, rising material costs are forcing automakers to cut discounts and raise prices, and reduced tax incentives are weakening domestic demand. To sustain growth, manufacturers are increasingly turning to exports.
"Gross profit, not net profit, per vehicle, plummeted to a mere $2,000. We can expect the net figure to be loss-making." Autoblog adds: "Data shows over 70 percent of Chinese car sales were loss-making. This left more than half of the country's auto industry in the red. Great Wall Motor (GWM) even saw net profits drop 17 percent despite steady revenue growth."
China's EV price war has now hit a wall. New regulations are discouraging below-cost sales, rising material costs are forcing automakers to cut discounts and raise prices, and reduced tax incentives are weakening domestic demand. To sustain growth, manufacturers are increasingly turning to exports.
Sojust like every other tech growth story (Score:5, Insightful)
Amazon took nine years to reach profitability. OpenAI posted an operating loss of 20bn. And most pertinently, Tesla took 17 years to reach profitablity. They all got significant state support to the tune of many billions, as well, as have all of the big three US car OEMs over the decades.
Treating this as some kind of gotcha is just idiotic double standards.
The difference between the Chinese and US automakers is what they did with the state support and the time afforded to them by being able to operate at a loss. The Chinese automakers used it to build innovation systems capable of launching new models in 18 months vs the 5 to 7 years it takes the US OEMs. The US OEMs, bar Tesla, used it to finance BAU, and more fool them, and they’re paying the price now. Tesla used it to do some weird mix of innovation and making Musk grotesquely rich.
Re:Sojust like every other tech growth story (Score:5, Interesting)
Re:Sojust like every other tech growth story (Score:4, Interesting)
The visible components like agile development are quite readily copyable in principle*, but not the underlying systems that make them feasible. I don’t just mean things like the reuglatory system; BYD has 110k R&D engineers!
* Things like decision-making culture are really hard to shift in practice.
Re: (Score:3)
BYD has 110k R&D engineers
BYD isn't a car company. In fact they existed a decade before entering the car industry. Most of those engineers have nothing to do with developing cars. In fact you can thank BYD for your Apple Magic Keyboard, and the touch sensor in your iPhone.
If you're going to compare R&D engineers you'll need to lump together Ford with Micron with Pansonic's battery division, with Crown Equipment (yeah BYD is a forklift company) with Siemens mobility (yep they make trains too).
Re: (Score:3, Interesting)
ah, yes, the terrible burden of 90+% home ownership, decades of near zero inflation on the everyday necessities of life, where "medical bankruptcy" isn't even a phrase and where blue collar workers get to retire on a full pension before white collar workers.
Re:Sojust like every other tech growth story (Score:5, Informative)
And some of the longest working hours , people live at work, and the "party" and oligarchs live in luxury. When the workers get a break on state mandated holidays, leisure prices sky rocket and many lose out.
China has achieved amazing things with an indoctrinated and a fearful work force but it is far from perfect.
China has the same problem as the West, selfish and greedy people who don't want to share wealth. China has the same problem we have in the West and the West is wising up to it.
Greed is a cancer killing the planet and we give it pretty names like aspiration and ambition
Re: Sojust like every other tech growth story (Score:2)
Re:Sojust like every other tech growth story (Score:5, Interesting)
From Europe we look at Americans that way too. Long hours, ridiculously little holiday entitlement (I just booked flights for my six week break over the new year, and I've still got time off to spare), and a billionaire-Epstien ruling class who live in luxury. Only they also get pollution, mass deportations, bankrupted by healthcare costs, school shootings, and so on.
China is far from perfect, but it also doesn't compare that badly.
Re: (Score:2)
Yes, they kinda sound similar.
Dog eat dog or State eat dog, perhaps BBQ'd in your local wet market. Golden Retriever burger anyone? Tastes a bit ruff.
It does feel like Communism embracing Capitalism has created a whole new breed of misery for working people.
We can be grateful for we live in quaint Europe. Don't let political loonies on either side screw it up.
Re: (Score:3)
Re: Sojust like every other tech growth story (Score:5, Interesting)
Re:Sojust like every other tech growth story (Score:5, Insightful)
Try getting admitted to a Chinese hospital without a fat wad of cash in your pocket up front. I double dog dare ya. If you have no money, they will let you bleed out in the waiting room. If you are in a city/town without a local hukou, you're double fucked.
The number of sock puppets shilling for China here is rather astounding.
Re: (Score:2)
"and where blue collar workers get to retire on a full pension before white collar workers."
Yes, if only I could enjoy the life of a blue collar factor worker in China. Why can't I work 12 hour shifts 6 days a week?!
Re: (Score:2)
"and where blue collar workers get to retire on a full pension before white collar workers."
Yes, if only I could enjoy the life of a blue collar factor worker in China. Why can't I work 12 hour shifts 6 days a week?!
Good news - you can! Ex. get a job with the FDNY and you can easily work 4 back to back 18hr shifts and pick up overtime on your days off too!
Apologies in advance for the following off topic rant/tangent...
FYI, FDNY dispatchers work an abnormal schedule. It's so abnormal it's difficult to quickly describe it. The normal shift, without mandatory or voluntary overtime, looks something like this:
DAY: SHIFT ... 24hr between here ...
1: 7am - 7pm (12hr)
2: 7am - 7pm (12hr)
3: 7PM - 7am (12hr overnight into next day
Re: (Score:2)
Re: (Score:2)
You are citing an 11 year old paper that itself states that only 2.4% of middle and 3.9% of lower income Chinese families have medical debtvs *36%* of US households.
Re: (Score:2)
Spare me your fake concern about Chinese engineers employed by BYD, for the love of god. This is not something you actually give a shit about, you’re just trying to think of some way to try to invalidate what I said, and you came up with this weak sauce
Re: (Score:2)
The Chinese automakers used it to build innovation systems capable of launching new models in 18 months vs the 5 to 7 years it takes the US OEMs. The US OEMs, bar Tesla, used it to finance BAU, and more fool them, and they’re paying the price now. Tesla used it to do some weird mix of innovation and making Musk grotesquely rich.
Not sure if making a new car model every 18 months is a good thing. ;) Even for phone models this seems to be too aggressive from the environment perspective. And EV's are supposed to be environment friendly and not make EV Waste
Re: (Score:3)
Re: (Score:2)
Exactly, no significant group of consumers is buying a new car every 18 months. This is about OEMs competing for new customers, not existing ones
Re: (Score:2)
Re: (Score:2)
It’s clearly not change for the sake of change, it’s rapid tech advancements, eg new battery chemistries, more advanced drivetrains etc.
You are going to have to set out the specifics of how you believe this creates more waste, bearing in mind that many of these improvements lead to greater efficiencies, less intensive materials usage, greater degrees of recyclability, etc.
Re: (Score:2)
Re: (Score:2)
Not sure if making a new car model every 18 months is a good thing.
Unless there is a lot of carryover between models it sounds like an absolute disaster for stocking of spare/replacement parts.
Re: (Score:2)
If only the Chinese OEMs had been able to think of that, they might have been able to redesign their autos to reduce the spare part challenge. You know, like being able to rapidly manufacture spare parts on demand if the need arises thanks to flexible lines, using zonal electrical architecture, replacing parts with upgraded replacement components, not strictly like-for-like, and a dozen other things.
Re: (Score:2)
You know, like being able to rapidly manufacture spare parts on demand if the need arises thanks to flexible lines, using zonal electrical architecture, replacing parts with upgraded replacement components, not strictly like-for-like, and a dozen other things.
I'm sure they will manufacture you parts on demand and FedEx overnight them for your old out of warranty Chinese EV LOL.
Re:Sojust like every other tech growth story (Score:5, Informative)
In China the government lead the development of technology with Government Guidance Funds and a somewhat bureaucratic process but with national long-term goals. https://en.wikipedia.org/wiki/... [wikipedia.org] A significant difference.
Re:Sojust like every other tech growth story (Score:5, Informative)
Remember that the West also used direct government money to finance R&D. It's just that it happened decades ago (following WW2 mostly). China is just a few decades late in that game, due to its own history, but is maybe pushing it further instead of letting the market handling it (and we all know the market isn't self-regulating as much as its defenders claim).
Re:Sojust like every other tech growth story (Score:5, Informative)
Re: (Score:2)
Don't we have DARPA for at least some of that?
Re: (Score:3)
The whole thing is so much more complex and incomparable. Some of the best research in the US was done in private company research departments, like Xerox PARC or Bell labs. However, they had a whole bunch of government integration and not just with the DoD. They also had huge links with the US national laboratories which also used to do a whole load of important work. The US government used to understand the value and, for example, made sure that the people funding Bell labs could continue to do so.
Now we
Re: (Score:2)
As far as market regulation goes, I've always maintained that under a Democratic-Capitalist political economy where everyone is both a market actor and a political actor, government is just another medium for market regulation. That said, it is a blunt and inaccurate tool for market regulation, so actions must neither be taken lightly nor quickly.
Re:Sojust like every other tech growth story (Score:5, Insightful)
while in the west it is private enterprise driven by the profits.
Thats what the cold-war era propaganda said. In reality, public-private partnerships werte essential to the post-war economic boom. ... Everybody subsidises.
DARPA, public infrastructure, aerospace ,
Re: (Score:2)
Re: (Score:2)
Private capital has most definitely been a significant funding sources for Chinese auto OEMs. Buffet is famously invested in BYD!
Re: (Score:2)
Most of the R&D in China is done with private money. The government does contribute, but it's more long term guarantees than it is cash.
In a democracy, policy can change ever 4-5 years. Look at the US, it's been alternating between pushing renewables to banning them to pushing them to banning them again, over the last 4 administrations. If you were a company developing renewable technology, would you have faith that your investment in R&D wouldn't be banned by the time it reaches market? Doesn't eve
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
The fact you think adherence to green policy has been a permanent fixture of European politics shows how fundamentally ignorant you are. You think Adenauer and the CDU were green? Or Thatcher and the Tories? Do me a fucking lemon.
Re: (Score:3)
I think everyone understands that fundamentally, dictatorships HAVE ALWAYS been potentially more nimble, more efficient, and more consistent.
At a longer view, the question is if the costs are worth those improvements.
Re: (Score:3)
The argument against has always been that freedoms and general welfare are better preserved in democracies. But the US is doing its damndest to follow the Russian model of faux-democracy-but-actually-incompetent-autocracy, ie the worst of all worlds
Re: (Score:3)
Did I say Trump? No, I did not, because while Trump is the current instantiation, the problem of the American right’s hostility to democracy is much broader than that. From Project 2025 to Thiel to Musk to gerrymandering to noise about repealing the 19th. Fuck you for underplaying the threats. I neither know nor care about whether your motives are those of a fellow traveller trying to create air cover, a nitwit poltroon unable to see the obvious, or indeed anything else: euphemising what’s going
Re: (Score:2)
Re: (Score:2)
The Chinese government funds innovation in China, while in the west it is private enterprise driven by the profits.
DRIVEN BY PROFITS?!?!? Can you say that with a straight face amid this AI bubble?
From this story yesterday: https://slashdot.org/story/26/... [slashdot.org]
"OpenAI lost around $38.5 billion in 2025 ..."
"... measured as a percentage of revenues, the company's operating losses slightly improved year to year, from 237 percent in 2024 to 160 percent in 2025."
Compared to China's EV situation - "the profit margin for China's auto industry plunged to 4.4 percent and dropped further to a historic low of 3.2 percent in early 2026.
Re:Sojust like every other tech growth story (Score:5, Informative)
Many of the big Western car manufacturers sold EVs at a loss initially too. I had an original Nissan Leaf that was heavily discounted and came with a 0% loan.
Re:Sojust like every other tech growth story (Score:4, Interesting)
I'm not sure Amazon is a good example here. The company famously opted to reinvest its free cash flow into growing the business, rather than saving them and booking them as net income. They likely could have been profitable sooner otherwise.
Also, I am not aware of Amazon receiving billions in government support in the 1994-2001 timeframe.
Re: (Score:2)
1. Multiple Chinese OEMs could have made the same choice to take profits as Amazon, but invested in growing the market instead by offering products at below cost
2. Remind me how much sales tax Amazon paid in that period? Post 2001, they started directly obtaining explicit subsidies for their warehouses and HQs, but the massive unfair competitive advantage they’ve always had has been avoiding tax on a gargantuan scale in a way other retailers could not.
Re: (Score:2)
Re: (Score:2)
Of course not having to pay the same tax as others is a subsidy. The economic effects are the same, which is why in public finance economics they are called tax expenditures. Subsidies are practically never targeted at single companies, so I don’t know why you think that’s some sort of gotcha.
Re: (Score:3)
They also do get subsidies in terms of things like tax-break to build warehouses, etc.
Re: (Score:2)
I think you're actually citing one of the reports that drove Amazon to increase wages and benefits.
Re: (Score:2)
Amazon is both an e-tailer as well as a logistics company that distributes products for other companies. Amazon for the most part does not MAKE products, though they have a number of Amazon branded products and a few like the Amazon Fire Stick that are their own products. Overall, that is a VERY different type of company that is there to create and sell products. With that said, you have the next piece of the puzzle, companies that sell products, and the cost of research and development will be the re
Re: (Score:2)
Re: (Score:2)
I knew who the submitter was before even seeing the name.
Re: (Score:2)
What a clever boy you are!
Re: Sojust like every other tech growth story (Score:2)
Re: (Score:2)
Treating this as some kind of gotcha is just idiotic double standards.
Indeed, this isn't related to cares or even recent history. Subsidies is a lever government has to enact policy, and every emerging industry has benefitted from it the world over. And selling at a loss to build consumer confidence is a well known and well understood business strategy.
The USA (and to a far lesser extent, but still significantly enough Europe) ignored the EV industry despite literally the world calling them out on it, and now the west is having a temper tantrum because China didn't.
And it gets worse! (Score:5, Informative)
Re:And it gets worse! (Score:5, Insightful)
Is this a problem? yes... but its also capitalism. you cant wave away "capitalism" when it benefits you, but not others and then be upset when others are benefiting and you are not.
This is more a problem for the companies to fix, but they wont, because US taxpayers will pay for the bail out, yet again while the correction of "capitalism" never happens due to it.
We are backwards on a lot of our policies and governance here, and the point of capitalism is looking a lot more like communism and Oligarch rule.
Re: (Score:3)
Government intervention in international currency markets is "capitalism"? Since when, and by what definition? Wikipedia says "Capitalism is an economic system based on the private ownership of the means of production and its use for the purpose of obtaining profit", which on the surface neither implies nor aligns with the Chinese government controlling the CNY-USD exchange rate.
Re: And it gets worse! (Score:2, Insightful)
Capitalism doesn't care where the money comes from, government or not
Re: And it gets worse! (Score:2)
It is standard practice for those private owners of the means of production to use some of the profits to bribe / lobby the government to revise policy in ways that support their businesses.
In other words, corruption is no less a feature of capitalism than it is of communism.
Re: (Score:3)
While I'm sure we all appreciate the ä宣éf's opinion, lying about gross economic statistics and manipulating currency is fundamentally non-capitalist.
I'm not going to disagree with you that Western governments have done so themselves sometimes (for example, the US unstated policy for at least 50 years after WW2 was to keep the USD overly strong as an 'invisible subsidy' to our western economic partners, making their manufactured goods more price competitive; US consumers got cheap
Re: (Score:2)
One is not better or worse than others, so nitpicking isnt exactly a solid argument to make.
Re: (Score:2)
The West discarded that system as democracy flourished. They are not compati
Re: (Score:2)
Wait till you hear what Glorious Leader in the US is trying to do with the USD.
Re: (Score:2)
Michael Chrighton wrote a book about it called "Rising Sun". It became a movie starring Wesley Snipes and Sean Connery.
Re: (Score:2)
It has been falling since a peak of 7.30 Yuan to the dollar in 2024, to 6.77 right now. That may have changed by the time you read this.
And Open AI ? (Score:5, Insightful)
That's how the world works.
How failure, becomes predictably human. (Score:2)
Congressional Insider Trading, is now a fucking job perk. Instead of Common F. Sense realizing how horrifically harmful that can be to the key market in US Capitalism and condemning it immediately it was defended, and is now unofficially known as Pelosis Law.
Gambling, a known and recognized concept that can easily create horrific addiction, got re-branded into "speculative markets". Which grew into a massive industry now in business with professional sports. Instead of Common F. Sense remembering why bo
Re: (Score:2)
Re: (Score:3)
I disagree. Parent is pointing at the crazy losses indured by loss leading rocket and AI investments from the parent evocated company. How is that fundamentally different from loss leading car sales? Were even original F9s launches sold with margin?
Re: (Score:2)
How many people have bought a product at a loss from Spacex vs How many ( 1 billion ) use ChatGPT ?
--1 : Making a stupid comment backing up AC making stupid comment that adds nothing to the debate.
Re: (Score:3)
Loss leader is a strategy of using the power of capital to win market share. Instead of innovation, production, or hard work to produce a better product or better value for the consumer. Winning on your own merits hasn't been part of our economic system as far as I know. (while China claims to be communist, they readily participate in the same global market as everyone else)
One thing I haven't read (Score:4, Interesting)
is how reliable these Chinese EVs have been over say...5 years? The stories that reach the US shores are a mix of "China bad!" and "China even more bad!" sprinkled with a bit of "We can't let China (who is bad!) sell cars here."
So, for the sane Europeans that come here, and own a Chinese EV...how's it been? What's service and support like?
Re: (Score:2)
Re: (Score:2)
You still can't believe China is capable of making quality goods?
Re: (Score:2)
For me it's not so much about China but about how long these manufacturers have been making cars. I don't really want a Tesla because it's to new a brand. I'd prefer a traditional auto maker get into EVs and do a good job. I feel they know how to make a car where as most EV brands seem to know how to make a computer on wheels.
I'm fortunate that I'm in a good position to wait things out until I make the EV plunge. I want one but my hybrid only has 83k miles, so I have a long time to go before I need to decid
Re: (Score:2)
This does go against what I originally posted, but I really like the Slate truck that's coming out.
It might not come out, since the whole value proposition hinged on the $7,500 tax credit that the Trump administration killed. It doesn't even have an infotainment system, and Slate's answer of "put your phone in a vent holder and use that" is something you do in a beater from Craigslist, not a nearly $30k brand new EV.
Re: (Score:3)
is how reliable these Chinese EVs have been over say...5 years?
If you're only going to keep a car for 5 years, reliability probably isn't going to be an issue regardless of the manufacturer.
On the other hand, if you're the type to keep a car and drive it until the wheels fall off, with a Chinese vehicle, that time might come sooner than you'd expect.
Dumping vs socialising the costs (Score:2)
It looks like these manufacturers are dumping, while the legacy auto+oil industries require military interventions to be supported by the taxpayers.
That being the case, I'd say the Chinese are getting a better deal and lower exhaust emissions as well.
So what? (Score:5, Insightful)
Re: (Score:2)
Tesla and BYD were both founded around the same time (2003). I think BYD had a car on the market before Tesla did. Tesla was profitable in 2009, though that fluctuated until about 2020. In 2008, BYD was profitable, though by only about $10 per car. In 2013, Tesla's net profit per car was $45-46,000. In 2013, BYD had a net profit per car of... $0.02-0.03. Yup, two or three shiny little pennies per car.
It's normal for a new company
The old story (Score:3)
Re: (Score:2)
Re: (Score:2)
I thought a selling point of an EV was that they are less complex and therefore require less overall maintenance. Is that not correct?
Where Does The Money Come From? (Score:2)
China is routinely accused of this subsidize and sell below cost strategy and I'll accept that it is really happening. But, where does the money for the subsidies come from? What profitable export is generating their wealth if "everything" is subsidized?
There has to be profit or free resources(inputs) or they would not have the money for all these subsidies.
Re: (Score:2)
Vanity brands (Score:2)
Its how directv dominated the cable (Score:2)
Re: (Score:2)
Remember Apple was planning an EV (Score:2)
Inconsistent information (Score:2)
The headline says "sold at a loss", but the summary doesn't:
Profit dropping is not the same as "sold at a loss."
Re: (Score:2)
Sales loss or operating loss (Score:5, Interesting)
Chinese economy is a mess (Score:2)
Re: (Score:2)
https://fortune.com/2026/05/11... [fortune.com]
Re:You cannot trust China to tell you the truth (Score:5, Funny)
Source: Donald Trump
Good thing we have Elon Musk though.
Re: (Score:2)
Re: (Score:2)