China’s EV overcapacity spurs global fears of more price cuts

BEIJING/TOKYO — Electric vehicle production capacity in China continues to expand at breakneck speed despite being vastly larger than domestic demand, fanning fears that manufacturers will export vehicles abroad at cut-throat discounts.

The break-even point for factory utilization in the automotive industry is usually around 80%, but the level for new energy vehicles, which includes EVs, is only around 50% in China. Several emerging EV makers have already gone bankrupt due to overcapacity in the industry.