China's electric car revolution is eating itself

In the world's biggest market for electric cars, a sales miracle is turning into a 'Darwinian battle' for survival.
The number of electric vehicles (EVs) sold in China rocketed to 6.4m last year, accounting for more than half of all cars sold.
Despite this roaring success, growth is now slowing and the market has become oversaturated with companies fighting to win over drivers.
It has prompted a vicious price war that has caused alarm in Beijing.
Last week, the government issued a stern warning to 16 brands including BYD, Nio, Leapmotor and SAIC Motor, which are among the country's biggest domestic brands, urging them not to destroy each other by merciless undercutting on price.
Analysts believe competition is only set to become more intense, with a potentially significant impact on export markets such as the UK and Europe. It will also have consequences for Western brands such as Tesla, which are also fighting for sales in China.
'There's been a Darwinian battle, where the larger manufacturers in China are heavily discounting, and really pushing prices downwards in a brutal fashion,' says Matthias Schmidt, an independent automotive analyst.
'They're looking to destroy their domestic peers and also Western manufacturers, trying to get them to exit the Chinese market.'
'Made in China'
While the clash may be good for Chinese drivers, who benefit from cheaper cars, it is bad news for Britain. Chinese brands are charging higher prices abroad, using international sales to bank-roll price cuts at home.
The battle royale is the culmination of a years-long EV boom in the country, kicked off under Beijing's 'Made in China' strategy.
Recognising the fact that Chinese manufacturers were unlikely to overtake Western rivals that made traditional internal combustion engine (ICE) cars, Beijing prioritised support for future hybrid and electric models – known collectively as 'new energy vehicles'.
Since then, hundreds of EV brands have emerged off the back of surging consumer demand and massive state support, including subsidies, state-backed loans, investments from local governments and huge spending on charging infrastructure.
Growth has been explosive, helping China become the world's largest manufacturer of EVs by far and more recently the largest exporter of cars globally.

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