The Chinese horde is coming?
AUTOS | |
With Too Many EVs, Chinese Carmakers Look to Foreign Markets | |
| |
Photo by Michael Förtsch via Unsplash | |
Chinese EV makers are charging abroad. | |
After a strong boom in electric vehicle sales among Chinese carmakers, the numbers have started to wane. Now, auto manufacturers that are producing more cars than they can sell are trying to regain that momentum overseas, The Wall Street Journal reported. | |
These Babies Sell Themselves | |
In the past few years, Chinese automakers like BYD, MG, and NIO have sold millions of EVs — more than US and European manufacturers combined. However, sales don’t always translate to profit, to which too many Chinese automakers can attest. A bigger problem, though, was that much of that sales growth was driven heavily by government subsidies and support from large backers like Alibaba, Tencent, and in BYD’s case, $130 billion man Warren Buffett. | |
While it allowed carmakers to expand capacity and pump out EVs at a blitzkrieg pace, government subsidies have declined and Chinese consumers are tightening their belts. To counteract the slowing demand in their homeland, the Chinese government is encouraging auto companies to look to foreign markets to fuel their growth: | |
| |
In the US, where Chinese cars are scarce thanks to expensive tariffs, big automakers like Ford and General Motors are desperately trying to lower production costs and EV prices to compete with a possible flood of Chinese cars. With BYD’s cheapest car selling for about $12,000 in some markets, it's easy to see why other carmakers are starting to sweat. | |
Written by Griffin Kelly |