China’s EV Makers Wage Relentless Price War, Stirring Fears of Industry Collapse

China’s electric vehicle (EV) market is mired in a brutal price war, with manufacturers slashing margins to gain sales. As players fight for dominance, the stakes are high — some warn that only the strongest will survive.

BYD, one of the biggest names, led a fresh wave of cuts, triggering shares to tumble across the broader EV sector. This move underscores how far the competition has escalated: dozens of brands are offering deep discounts in a bid to capture market share. 

To fend off collapse, many automakers have extended incentives into 2025. Nio and Li Auto rolled out zero-interest loans, and cash subsidies have become widespread tools to prop up shaky sales. 

Still, Chinese authorities are worried. The government has begun warning automakers to curb indiscriminate price cuts, fearing “involution” — a self-destructive cycle of overcompetition that leads to unsustainable margins and economic instability. 

In essence: China’s EV market is caught in a survival test. Discounting may drive volume now, but the cost could be thinning margins, bankruptcies, or forced consolidation in an industry that once promised dominance — not a race to the bottom.