However, this affordability stems from a major issue in China’s auto industry: a “hangover” from years of massive over-investment and government subsidies. The Chinese government’s “Made in China 2025” policy poured billions into the EV sector to create a world-leading industry. The plan worked, but it also created enormous overproduction capacity.
China now has far more cars than it can sell domestically, which has led to an intense price war. The market is crowded with 129 brands, but experts predict that only about 15 will be financially stable by 2030. To deal with the excess inventory, Chinese companies are exporting aggressively, flooding markets like Brazil, where they hold over 90% of the EV market share. While this means great deals for buyers now, it raises questions about the long-term impact on local auto industries and the future resale value of these vehicles.