Chinese electric cars are going global. A cut-throat price war at home could kill off many of its brands

In the spring of 2024, Li Hongxing, who runs a social media ad agency, took on a client he believed to be a rising star in China’s electric vehicle market. A marketing veteran in the auto industry, Li went so far as to borrow to cover the cost of ads for Ji Yue, expecting payment later from the EV startup he thought had everything it needed to succeed: efficiency, growing sales, and deep-pocketed backers.

But it didn’t.

Within half a year, the carmaker collapsed, turning Li’s gamble into a nightmare, saddling him with debt of 40 million yuan ($5.6 million).

“It was a feeling of sheer despair,” Li said.

Ji Yue’s downfall is hardly unique in China’s auto industry, where hundreds of brands have gone under in a brutal race to the bottom over the past few years. The country’s EV boom not only gave rise to global leaders like BYD; it has also led to extensive overcapacity in which a crowd of carmakers are scrambling for market share.

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