China Banked EVERYTHING On This

Chinese EV companies have been 
locked in a death race for years.

Now, they’re heading for a massacre.

And not even the kind of massacre CCP likes.

Welcome to China Uncensored. I’m Matt Gnaizda,

filling in today for Chris Chappell,

whose Mario cart lost control on Rainbow Road,

and we’re waiting for him to rematerialize.

Before I tell you how crazy 
China’s car industry has become,

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What are you waiting for?

So, are you looking to buy an electric car?

But you’re not too keen on Tesla because,

you know...?

Then maybe you should do like the UK’s 
King Charles and buy an EV from China.

Because when you don’t want to financially

support someone whose morals and 
politics you don’t agree with,

then the natural solution is to go with China.

According to my favorite Chinese 
state-run newspaper, The Global Times,

“Many saw [King Charles’ choice] as an indirect 
endorsement of China's development model.”

Which surely shows you how great the 
Chinese EV industry is doing these days.

If you ask the Chinese press,

everyone abroad 
wants a piece of the Chinese EV industry –

from Indonesians

to Africans.

At the same time, the industry is 
clearly thriving at home and globally.

That’s what Chinese state-run 
media would have you believe.

But recently, there’s been an avalanche 
of signs that China’s EV industry

is driving towards a catastrophe.

And it looks a bit like this.

Metaphorically.

One of these signs came from 
China’s leading EV company, BYD.

Back in May, BYD announced a fresh round of price 
cuts on its models

by as much as 34 percent.

BYD’s cheapest battery-powered hatchback

went 
from $10,000 dollars to less than $7,800.

That’s an insane price drop from 
an already very low starting point.

I’ve seen bidets more expensive than that.

BYD’s announcement sent 
Chinese car stocks plummeting,

with the shares of some companies 
falling nearly 10 percent.

Around the same time, Wei Jianjun,

the 
CEO of Chinese automaker Great Wall Motor,

warned in a hard-hitting interview that 
China’s auto sector is in an unhealthy state.

He even compared the Chinese auto industry 
to China’s crisis-hit property sector,

saying that “now, Evergrande in the 
automobile industry already exists,

but it has not collapsed”.

Does this mean besides ghost cities 
we’re also gonna get ghost cars?

Evergrande was once China’s 
biggest property developer,

but it collapsed under the weight 
of its own massive debt in 2021.

It threatened to drag the entire 
Chinese property market down with it.

Suggesting that the auto industry 
has a similar thing coming—

that’s not exactly a chipper outlook.

Ironic that the electric vehicle 
industry is running on fumes.

But Wei’s biggest bombshell 
turned out to be what he termed

“secondhand cars with zero mileage”.

He was referring to a strange surge of undriven 
vehicles on China’s second-hand market.

That sounds like a contradiction,

because how can a car be second-hand 
if it hasn’t been driven by anyone?

Did someone carry it into a 
garage and then not touch it,

like a vintage toy left in its package?

Kind of, yeah.

It’s part of a scheme where automakers

and car 
dealers take their oversupply of unsold cars,

offload them further down the food chain,

and then register the cars as sold.

Yep, sales numbers are up again!

If that sounds sketchy to you, relax…

because you’re right.

The scheme can give the impression 
that tons of cars are being sold

when the only thing that’s happening

is that unsold cars are being handed over to 
players in the second-hand market.

It's another indication that the Chinese 
EV sector is very much out of balance.

Now, ordinarily, we should take 
the claims of a Chinese auto tycoon

like Wei regarding the industry and 
its players with a grain of salt,

plus a mountain of salt on the side.

Leading figures in the sector 
often lash out at each other.

BYD was quick to dismiss Wei’s remarks 
on the industry’s health as “alarmist”.

But this time around, Wei was pointing 
to things that were so unnerving

and caused such a stir that China’s commerce 
ministry called a meeting a few days later.

Which wasn’t a good sign.

The CCP never calls meetings to say,

“Great job! Keep making us proud!”

Trade groups and automakers, 
including BYD, were asked to attend.

They reportedly discussed the 
“zero-mileage” used car sales,

and several other issues that 
are hurting the industry.

As the meeting got closer,

the situation got worse.

The same day the meeting was called,

shares in Chinese automakers fell again.

That same week, a big BYD car dealer 
in eastern China went out of business,

shutting down at least 20 stores and 
leaving more than 1,000 customers in limbo.

And, soon after that, Chinese car dealers came out

urging automakers to stop 
dumping inventory on them.

Which would be like McDonald’s telling farmers,

“Stop giving us so many 
beef patties and potatoes.”

That’d be a clear sign that

McDonald’s business is unhealthy…er.

So, things are not looking as dandy for Chinese EV 
business as King Charles’ purchase might suggest.

But how did it get to a point where it looks like 
Chinese car companies are manipulating sales,

and an industry leader is warning 
of an Evergrande-type collapse?

Well, as with so many other issues in China,

we need to start with the great, glorious,

and correct Chinese Communist Party.

Not long after Chinese leader Xi 
Jinping came to power in 2012,

the CCP started openly talking about making China

a technology and manufacturing leader 
in a long list of modern industries.

Near the top of that list was the field of 
new energy vehicles such as hybrids and EVs.

To develop this new field, both the 
central government and local governments

began releasing a flood of 
subsidies and incentives

to encourage everyone far and wide to jump in.

And everyone did.

Even Chinese companies with little 
or no experience in car-making

rushed in to get a slice of the subsidized pie.

These included smartphone maker Xiaomi,

search engine giant Baidu,

and even property developer Evergrande.

It’s been estimated that by 2023,

the government had spent at least $230 
billion dollars to build the EV industry.

That’s a spectacular amount of money,

and 
surely just as wise of an investment as

a quality bidet or a vintage 
toy still in its packaging.

In some ways, the effort did pay off.

China is now home to the world’s 
largest battery maker, CATL,

and the world’s now largest EV-maker, BYD.

But, at the same time, there are a total of 
168 other automakers operating in China today,

and most of them have a market 
share of less than 0.1%.

No other country comes close to having so many 
automakers,

and there’s a reason for this.

It’s because it’s unsustainable –

even for a market of China’s size.

This kind of thing only happens 
in very distorted markets.

Like when people start car companies 
to get government subsidies,

rather than to actually serve customers.

So to solve the overproduction problem created 
by massive Chinese government subsidies,

the Chinese government had another brilliant idea:

Ship tons of EVs overseas,

and sell them 
in foreign markets at low low prices!

You don’t see them in the US,

because of the 
massive tariffs Biden put in place to stop them.

But Chinese EVs are all over Europe.

And the UK, which I’m not sure 
if that’s still in Europe.

In 2023, China became the 
world’s largest exporter of cars.

But fast forward to 2025, and China’s 
EV exports have been stalling.

And there’s a reason for that: global backlash.

The managing director at auto 
consultancy JSC Automotive said,

“The US market is completely 
closed and Japan and Korea may

close very soon if they see an 
invasion of Chinese carmakers”.

He added that “Russia, which was 
the biggest export market last year,

is now becoming very difficult.

I also don’t 
see Southeast Asia as an opportunity anymore”.

Wow, I’m shocked that pushing out a crappy 
product that no one likes is lowering demand.

If only there were a basic economics class 
that could have warned them about this.

So, with Chinese carmakers 
facing more difficulties abroad,

many will have to find a place in the Chinese 
domestic market if they want to survive.

But there isn’t room for all of them.

The Chinese government has already said that 
China

has too many electric vehicle companies.

There are more Chinese EV companies 
than there are NCIS spinoffs.

This leaves China’s 169 automakers 
with an existential question:

Who will go belly up?

And who will claw their way to the top?

This has sent the Chinese EV industry 
into a death spiral so brutal,

it's been described as a war.

It’s in this war that companies 
like BYD v iciously slash prices

to try to squeeze out the competition,

and it’s in this war that many 
appear to be distorting car sales

in the hopes that encouraging numbers will inspire

confidence among investors and 
cause despair among competitors.

Meaning this war has found a way to somehow 
make China and car salesmen less trustworthy.

That’s actually downright impressive.

China’s own state planner cautioned 
that things were getting too heated.

Companies are selling their 
cars below production costs,

and adding extra features and upgrades for free.

In this environment,

it’s not surprising that EV makers 
don’t have anything resembling profits.

That’d be like going to a job interview

and 
when it comes time to negotiate salary you say,

“I’ll pay you to work here!”

then wondering why you’re hungry all the time.

Xpeng reported losses in the first quarter 
of this year amounting to $90 million,

and Nio reported losses of 
nearly one billion dollars.

China’s golden child, BYD, reportedly 
carries a debt burden of about $45 billion.

But according to industry insiders,

what we are seeing now is just 
an appetizer of what’s to come.

A BYD executive said in early January

that 
the new year will be a final knockout round.

And the managing director of a car 
advisory firm told Reuters that

the development in recent weeks points 
to a bloodbath coming later this year.

On the bright side, it’s nice to hear a story 
happening in China use the term “bloodbath”,

and it doesn’t involve killing dissidents.

You see, the EV price war is getting 
so intense that experts are estimating

that any EV maker that sells under 2 
million vehicles a year will not survive.

That’s about the same as the total number 
of cars Mercedes-Benz sold last year.

So, it’s not just tiny EV startups that are going 
to be left in the dust in the EV death race;

even large EV manufacturers are 
likely to get knocked off the track.

This means that thousands of subsidized 
jobs

and massive amounts of public funding

risk being lost in the near future as 
automakers start going under one by one.

But fortunately, the Chinese 
economy is doing great,

and there are plenty of well-paying 
jobs available for everyone, right?

Right?

It could take a particularly heavy toll on 
the Chinese provinces where local governments

are already in deep debt,

and they’ve bet big on 
their region emerging with a robust EV industry.

Which is like telling your kids, 
“You’re gonna get to go to college…

if I win big on this slot 
machine! Fingers crossed!”

For some of China’s most indebted regions,

the coming EV slaughter might be what pushes 
them over the financial and economic edge.

At the same time, it’s not just tons of 
investments and jobs that are at stake –

people’s lives are on the line, too.

In his viral interview, Wei, 
the CEO of Great Wall Motor,

spoke about how the price war

has resulted 
in some EV models having their prices

slashed from 220,000 yuan to 120,000 yuan,

adding: “What kind of industrial 
products can be reduced by 100,000 yuan

and still have quality assurance?”

So something that’s made in China is 
now even more dangerous and unreliable?

Again, downright impressive.

And Wei is not the only one 
that has brought this up.

There has been growing concern 
that the EV fight is pushing

companies to cut corners 
to be as cheap as possible.

One American high school student I know

told me 
he had recently visited China as part of a group.

They gave the students a 
tour of a Chinese EV plant,

and he was surprised that these 
cars did not have airbags.

The EV safety issue grabbed 
nationwide attention a few months ago,

when a driver in a new car produced 
by Xiaomi—the smartphone maker—

lost control of the car after 
having used its autopilot software.

The vehicle hit a cement pole and caught 
fire, killing three university students.

So, at this point it’s a matter of how 
much China’s EV war is going to cost

in terms of money, jobs, 
and lives before it’s over.

But on the bright side, King Charles bought one,

and who’s more in touch than a 76 
year old that lives in a palace?

If by the time the Chinese EV sector stabilizes,

the industry’s reputation has become 
shattered by stories of vicious infighting,

the dumping of discount cars, 
and major safety problems,

then the war could end without any real winners.

Like most wars.

Few people will want to buy a car 
from the companies that are left.

Perhaps even the royals will 
opt for a different vehicle,

even if it’s just a few horsepower.

And if you don’t believe me,

just ask this auto tycoon what a bad 
reputation can do to your EV company—

and that’s when the quality is great.

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Once again, I’m Matt Gnaizda.

Thank you for watching China Uncensored.