Here are some points that suggest that EV business in China is not worth investing.
- China's EV market rely heavily on government subsidies to sustain sales.
In 2020, the Chinese government announced plans to phase out subsidies for electric vehicles by 2023. The lack of subsidies has led to a decline in sales for almost all the manufacturers.
- Highly competitive, with over 500 EV manufacturers in China, making it difficult for companies to differentiate themselves and achieve profitability.
- Profit margins are thin, with some manufacturers reporting margins as low as 1-2%.The intense competition has also led to a price war, further squeezing profit margins.
- That's a disturbing trend in China's EV industry. Reports have emerged of some shady manufacturers producing "empty shell" electric vehicles, also known as "zombie cars," solely to collect government subsidies. These vehicles often lack essential components, such as batteries, motors, or even wheels, making them unusable.This practice, known as " subsidy fraud," data
These points suggest you shouldn't invest on the EV business in China.
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