China’s EV Market is in turmoil

Energy News Beat

China’s EV market is quite fascinating, and some of their products are equipped with cool features; however, their predatory practices, which contribute to trade imbalances in export markets, are taking a toll on the EV market. Peter St. Onge, Ph.D., is a notable thought leader, and I highly recommend following him on X. I have included his post in this article and will reach out to him again to explore the possibility of having him on the podcast. One problem with any data coming out of the Chinese government is the same one we had with the Biden Administration. You can’t trust government numbers, so please take these numbers with a block of salt.

I still believe that Tesla will remain the dominant EV manufacturer in the United States. At the same time, other automakers attempt to phase out their EVs and shift toward hybrid models that consumers are increasingly purchasing. While I do not provide investment advice, Tesla is not just a car company; it is a tech leader. And for that reason, they are a stock to watch and buy.

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Key Points

Research suggests China’s car industry, especially EVs, is facing a severe downturn, with around 400 of 500 EV companies failing.
It seems likely that major companies like BYD and Li Auto are profitable, while others like WM Motor and HiPhi have gone bankrupt.
The evidence leans toward this crisis impacting domestic customers, leaving many without vehicle support, and affecting global markets like Europe and Brazil.
Export data for 2025 is limited, but 2024 saw 6.41 million vehicles exported, mainly to Russia, Mexico, and Europe.

China’s car industry “imploding” with 400 car companies already gone.

Just 2 are making money.

China juiced fake GDP with trillions in handouts — ramping it up after Trump’s tariffs.

It turns out they bought the growth. And now they’re selling it for scrap. pic.twitter.com/Y8AVNlIz1d

— Peter St Onge, Ph.D. (@profstonge) June 25, 2025

Overview

China’s automobile industry, particularly its electric vehicle (EV) sector, is experiencing significant challenges, with many companies shutting down and millions of vehicles left unused. This situation has left domestic customers in a difficult position and is influencing global markets through increased exports and trade tensions.

Impact on Companies and Customers

The crisis has seen approximately 400 out of 500 EV companies cease operations, affecting customers who now face issues with vehicle maintenance and support. Bankrupt companies include WM Motor, Singulato, Aiways, Hengchi, and HiPhi, impacting around 160,000 car owners. Only BYD and Li Auto remain profitable, while others are burning through cash, leading to a market flooded with discounted, potentially unreliable vehicles.

Global and Export Implications

The oversupply has led to a “nuclear price war,” with BYD slashing prices by up to 34%, affecting global markets. Europe has imposed tariffs up to 38% on Chinese EVs, and Brazil is seeing a surge in BYD exports, impacting local industries. While 2025 export data is scarce, 2024 exports reached 6.41 million vehicles, with major destinations including Russia, Mexico, and Europe.

Background and Scale of the Crisis

Research indicates that China’s car industry, especially EVs, is in a severe downturn. An X post by Peter St Onge, Ph.D. , highlights that out of 500 EV manufacturers, approximately 400 have failed, leaving millions of abandoned EVs across the countryside. This is corroborated by Bloomberg: China’s Abandoned Electric Cars Pile Up After EV Boom Fueled by Subsidies, which notes a decline from roughly 500 EV makers in 2019 to around 100 currently, with many forming “EV graveyards.” The evidence leans toward this being a result of overcapacity, with EVBoosters: 400 Chinese EV companies ceased operations between 2018 – 2025 confirming the scale of closures.

Company Failures and Customer Impact

The crisis has seen several notable companies go bankrupt or cease operations. Specific examples include WM Motor, which filed for bankruptcy in October 2023, and Singulato and Aiways, which have left the market, affecting an estimated 160,000 Chinese car owners, as per Rest of World: EV owners face software blackouts as startups go under in China. Other failures include Hengchi, owned by Evergrande, with subsidiaries forced into bankruptcy, and HiPhi, which declared bankruptcy in 2024, as reported by Battery Tech Online: 7 Battery & EV Companies That Have Filed for Bankruptcy. These closures have left customers, primarily domestic buyers, without support, leading to potential reliability issues with their vehicles.

The domestic market is further strained by the end of EV subsidies in several cities, as noted in the X post, with local governments running out of money. This has triggered a “nuclear price war,” with BYD, the world’s largest EV maker, slashing prices by up to 34%, and Great Wall Motor following suit, as mentioned in CNBC: China’s EV price war is heating up. The chairman of Great Wall Motor likened this to China’s “Evergrande moment,” referencing the real estate collapse, indicating systemic risk.

Profitability and Market Dynamics

Only two companies, BYD and Li Auto, are currently making profits, while the remaining 98 are burning billions to stay afloat, according to the X post. This is supported by CNN Business: Analysis: China’s EV market reshaped by a brutal elimination round, which notes that out of over 200 EV manufacturers, many smaller ones are unlikely to survive due to oversupply and price wars. The market is flooded with discounted vehicles, potentially unreliable, affecting consumer trust and market stability.

Global Repercussions and Export Trends

The oversupply has global implications, with Europe imposing tariffs up to 38% on Chinese EVs to protect local producers, as reported by Reuters: China vehicle export growth to slow in 2025. This move was prompted by a surge in exports, with Brazil seeing a river of BYD cargo ships, severely impacting its domestic car industry, as mentioned in the X post. The U.S. market remains protected by safety regulations, but the impact is felt in other sectors like solar panels and windmill components, with at least half of windmill components and up to 90% of solar panels imported from China, per the X post.

Export data for 2025 is limited, but 2024 saw China’s vehicle exports rise by 22.8% to 6.41 million units, as per Reuters: China’s vehicle exports rise 22.8% in 2024. Major destinations include Russia, Mexico, and various European countries, with top exporters by brand in 2024 being Chery (1,140,000), SAIC (929,000), Changan (536,000), Geely (532,000), Great Wall (453,000), BYD (433,000), BAIC (274,000), Tesla (260,000), JAC (249,000), and Dongfeng (246,000), as per Best Selling Cars Blog: 2024 (Full Year) China: Car Production and Exports by Brand. The X post also mentions the impact of Trump’s trade war, with China dumping roughly $1 trillion in stimulus, leading to inflated economic data like 6.4% growth in retail sales, which may not reflect true market conditions.

Economic and Geopolitical Context

This crisis is part of a broader trend of economic overextension in China, with ghost cities and other sectors like steel and consumer goods suffering from similar overcapacity issues, as noted in the X post. The government’s decision to end subsidies and the pressure from global trade tensions, particularly since Trump’s trade war, have accelerated the implosion. Elon Musk’s comment that Chinese EV makers could “demolish” other companies without trade barriers, as per CNBC: Elon Musk says Chinese EV makers will ‘demolish’ other companies, underscores the competitive threat, though tariffs are mitigating this in some markets.

Conclusion

The implosion of China’s car industry, particularly EVs, is a complex issue with significant domestic and international ramifications. The failure of numerous companies has left customers without support, while the oversupply is driving global trade tensions. While 2025 export data is not fully available, the 2024 figures indicate continued export growth, with major impacts on markets like Europe and Brazil. This situation may lead to a “Lehman moment” for China, as suggested in the X post, with potential ripple effects on global industries.

Table: Top Car Exporters by Brand in 2024