Caixin
Feb 05, 2019 04:19 PM
BUSINESS & TECH

Electric Vehicle Makers Choke on Overpriced Purchases

Lifan new energy vehicle production line in the southwestern city of Chongqing. Photo: IC
Lifan new energy vehicle production line in the southwestern city of Chongqing. Photo: IC

A wave of profit warnings from several of China’s electric vehicle (EV) and associated component makers suggest that weaning the group from state support may be more painful than expected, with many companies now taking hits from purchases that were substantially overvalued.

Beijing wants to turn China into an EV powerhouse as part of a broader drive to promote cutting-edge technologies to clean up the country’s air and also create a new group of high-tech exporters. But its aggressive subsidies and other state support have created a bumper crop of players, many using older technologies with little opportunity for success.

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