Chinese electric cars price
In spring 2024, social media advertising expert Li Hongxing partnered with a client he considered a promising newcomer in China’s booming electric vehicle industry.
With decades of experience in automotive marketing, Li even took out loans to fund advertising campaigns for Ji Yue. He anticipated reimbursement from the electric vehicle startup, which appeared to have all the ingredients for success-strong efficiency, rising sales, and powerful financial backers.
But things quickly unraveled.
In less than six months, the automaker went bankrupt, leaving Li’s risky bet in ruins and burdening him with more than 40 million yuan ($5.6 million) in debt.
“It was absolute despair,” Li recalled.
Ji Yue’s collapse is not an isolated case in China’s electric vehicle sector, where hundreds of brands have folded amid intense competition in recent years. While the country’s EV boom has produced global leaders like BYD, it has also created significant overcapacity, with numerous automakers competing fiercely for market share.
The Chinese government has consistently provided subsidies and other incentives to electric vehicle manufacturers-a strategy that propelled China to become the world’s largest EV market and fueled growth in the world’s second-largest economy.
Industry Experts
Intense price wars have eroded profits and put immense pressure on both automakers and suppliers. Even leading EV companies are reportedly forcing parts manufacturers to sell at a loss while stretching payment terms for months, according to a dozen suppliers, carmakers, and industry experts interviewed by Newfasttv
This reflects what Chinese officials describe as “disorderly” competition, a challenge that spans not only the EV sector but also industries such as solar panels, e-commerce, and food delivery.
Meanwhile, Chinese EV brands like BYD, Chery, Geely, and Changan are expanding globally, helping China’s auto exports reach nearly 6 million vehicles last year-the highest of any country.
However, this surge in exports has raised international concerns, leading to measures such as tariffs and trade restrictions from regions including Europe, Mexico, and Canada.
China continues to lead the global electric vehicle market.
Although EV sales outside China rose 27% compared with the same period last year, the country still represents over 60% of worldwide electric vehicle sales.
Global Electric Vehicle Sales, January – August 2025.
In an effort to stabilize an economy burdened by deflation-partly fueled by overcrowded industries engaging in steep price cuts-Beijing is moving to ease the intense commercial rivalries.
In a Communist Party magazine article released this month, Chinese President Xi Jinping urged authorities to “crack down on chaotic, cutthroat price wars among companies.
In recent months, Beijing has introduced a range of measures to tackle the problem. Officials have called in automotive executives to caution against triggering price wars, implemented regulations to shorten payment cycles within the industry, and issued guidelines encouraging local governments to reduce subsidies and address overcapacity.
China’s Economic Growth.
Economists and industry experts remain doubtful that Beijing’s recent measures will provide a quick solution, as reducing overcapacity is a complex challenge. For years, the government has promoted growth through heavy investment and subsidies.
Experts caution that abruptly cutting excess capacity and creating a market where only a few EV brands survive-even if politically desirable-could lead to significant job losses and further slow China’s economic growth.
Those are certainly important first steps, and they need to be taken,” said Chetan Ahya, Chief Asia Economist at Morgan Stanley, referring to the recent government measures. “However, simply cutting capacity will not solve the problem entirely-halting investment abruptly could create social stability challenges.
Employment remains central to social stability-the foundation of Communist Party governance. China’s automotive manufacturing sector supports over 4.8 million jobs, according to data from CEIC released earlier this year.
‘If not you, then them’
Ji Yue’s meteoric rise and sudden collapse highlight the harsh realities of China’s fiercely competitive electric vehicle industry.
Launched in 2021 as a joint venture between Chinese tech giant Baidu and leading automaker Geely, the startup rapidly captured market attention.
In May of last year, Li started providing social media advertising services for Ji Yue. Encouraged by his initial experience with the company, he felt confident enough to sign a long-term contract, even offering extended payment terms to support the EV startup.
Fierce Market Competition
By late October, Li began to suspect that Ji Yue was facing liquidity problems. A few weeks later, the EV startup announced a restructuring to attract new capital amid “fierce market competition,” effectively signaling the end of its short-lived operations .
For a major company supported by two prominent shareholders, with growing sales and several promising indicators, its sudden collapse was completely unexpected,” Li said, noting that he has not yet been repaid by the startup. Newsfasttv has contacted Baidu and Geely for comments regarding the failure of their joint venture, Ji Yue.
China’s electric vehicle boom originated from a major government gamble on what was then a niche technology in the 2000s. By the early 2010s, the government had designated EVs as a strategic sector, providing extensive financial incentives that helped produce some of the world’s leading EV manufacturers, such as BYD, whose sales last year surpassed Tesla’s.
This support also contributed to the rise of nearly 500 domestic auto brands at their peak around 2019.
The boom, however, quickly turned brutal.
“With limited market growth, increasingly similar products, and a flood of new competitors, the competition continues to intensify ,” said Bo Yu, China country manager at Jato Dynamics, an automotive market intelligence firm.
This intense competition has pushed China’s auto industry into what some insiders describe as ” knockout rounds.” According to HSBC research, more than 150 domestic brands and over 50 EV makers are still fighting to survive.electric
“Some companies are bound to fail-if not you, then them,” Li said.
Vicious cycle
Many automakers and their suppliers that remain in the market are waiting to see which competitors will exit next.
A lot of EV makers are currently operating at a loss. Most of their funding comes from industrial funds or private investors, and they continuously raise new financing rounds to cover these losses,” said Shen Hong, an economics researcher at a Peking University think tank advising the government.
The average profit margins for China’s automotive companies fell sharply to 4.3% last year, down from nearly 8% in 2017, according to data from the China Passenger Car Association. At the same time, manufacturing capacity utilization has remained around 50%, Morningstar, a financial services and research firm, reported.electric
China’s Automotive Industry
Years of intense price wars have left China’s automotive industry caught in a vicious cycle of shrinking profit margins, declining product quality, and a supply chain plagued by delayed payments, according to a dozen industry experts and insiders. Many carmakers and suppliers requested anonymity due to the sensitive nature of the issue.electric
One result of the fierce competition is that automakers have prioritized cost-cutting and operational efficiency over innovation, said Carl Cheng, an insurance manager at an EV manufacturer. Suppliers told Newsfasttv that auto brands frequently demand at least a 10% annual discount on their prices.
Suppliers have little option but to accept unfavorable terms quietly,” Cheng said. “If you refuse, there are always others ready to take your place.
Readmore China is gaining In the race to attract the world’s 2025-2026
He added that the overall quality of car components has clearly declined as a result.
In one extreme case, a coating materials supplier in Wuhan reported being forced to slash prices by more than 40% just to remain competitive.
“If you can’t cut costs elsewhere, you cut wages, hire temporary staff, push overtime, and maximize efficiency-that’s essentially all you can do,” the supplier said, noting that worker pay had to be reduced by about 30%.electric
Even after providing significant discounts, suppliers often face extended delays in receiving payments. Many leading Chinese automakers rely on supply chain financing By Newsfasttv
The specter of ‘involution’
Acknowledging the potential impact on economic growth, China has intensified policy measures by launching an “anti-involution” campaign. “Involution,” or “neijuan” in Chinese, is an anthropological term now used to describe excessive, self-defeating competition that produces little or no real progress.
In May, China’s top automotive regulator, the Ministry of Industry and Information Technology (MIIT), pledged to curb “involution-style” competition in the auto sector, warning that it undermines long-term R&D investment and diminishes product quality and performance.electric
China’s Top Economic China’s Top Economic
In July, China’s top economic policymaking body, the Central Financial and Economic Affairs Commission, chaired by Xi Jinping, made addressing “disorderly low-price competition” a key policy priority.
To alleviate payment delays for suppliers, Beijing also introduced rules requiring automakers to settle payments within 60 days.electric
However, industry insiders and experts remain skeptical that the measures announced so far will be sufficient.
For instance, regarding the new payment deadlines, experts note that automakers can still rely on promissory notes-a practice many already utilize .
“Compared to before, I don’t see the current price war easing much,” Cheng said. “Newly launched models at lower prices continue to attract large orders, and ultimately, automakers must prioritize survival.electric
S&P Global.
Price competition may take other forms, even as increasing government oversight limits automakers from making major price cuts, said Claire Yuan, director and lead analyst for China’s auto industry at S&P Global.
With affordability crucial for capturing market share, automakers may still engage in subtle competition, such as launching new models at lower price points, upgrading existing models without raising prices, or offering additional incentives,” she added.
Vincent Sun, senior equity analyst at Morningstar covering China’s automotive sector, also expects price competition to persist in the near term. “Resolving this issue may require more time and measures beyond the anti-involution campaign,” he said.
China’s Automotive Sector
For the time being, experts anticipate that price wars will persist until many brands follow Ji Yue’s fate, leaving only a few survivors. “When it comes to price wars, it’s unrealistic to expect them to be fully controlled through administrative measures,” said Shen, the economics researcher.
Ahya of Morgan Stanley noted that addressing oversupply in sectors like electric vehicles is especially challenging due to the larger presence of private enterprises compared with state-owned companies, which makes consolidation more complicated. He emphasized that structural reforms are necessary to effectively tackle overcapacity.
On a Chinese podcast in late August, He Xiaopeng, founder and CEO of leading EV maker Xpeng, warned that no Chinese automaker is safe yet. “I expect the knockout rounds in China’s auto industry to continue for another five years,” he said.
