(Bloomberg) — When Elon Musk’s Tesla delivered positive earnings few saw coming last quarter, China’s top electric carmakers were weathering a historical contraction in demand.

Warren Buffett-backed BYD, the country’s biggest maker of new energy vehicles — all-electric, fuel-cell and plugin hybrid cars — just reported an 89% slump in third-quarter earnings and warned profit could fall as much as 43% this year. BAIC BluePark New Energy Technology, China’s biggest maker of all-electric automobiles, also forecast a 2019 loss in a grim earnings update.

In a battle for survival, hundreds of Chinese EV makers are trying to convince buyers that it’s worth paying higher prices than opting for cheaper gas guzzlers. It’s not working at the moment. Electric-car sales fell for three straight months through September, as the government — after spending billions of yuan to nurture the industry — scaled back subsidies.

BYD said earlier this month its September sales fell 15%. While the phasing out of subsidies delivers a blow to BYD’s fourth-quarter earnings, some pressure could be eased thanks to its first-mover advantage in battery-only and hybrid vehicles, according to Bloomberg Intelligence analyst Steve Man.

Shares of BYD slid 5.6% in Hong Kong on Wednesday, hitting their lowest since February 2016. Daiwa Securities downgraded its rating to hold from buy, saying BYD’s weak outlook for the current quarter is concerning as it is peak season for sales. Meanwhile, cash-strapped Nio, which is backed by Tencent Holdings, faces a cash crunch and saw its chief financial officer resign earlier this week.

BAIC BluePark shares fell 8.2% in Shanghai after the company said it delivered 98,382 units in the first nine months, less than half its annual goal of 220,000. For the NEV industry as a whole, sales rose 21% in January-September, according to the China Association of Automobile Manufacturers, yet growth slowed significantly from the 84% surge a year earlier.

China considers EVs as strategically important and is mulling a target for 60% of all automobiles sold in the country to run on electric motors by 2035, people familiar with the matter have said. Still, with about 500 aspiring EV makers nationwide, authorities want to raise the bar for entry.

The Ministry of Industry and Information and Technology issued a draft rule last month that included a requirement for carmakers to have at least 6 billion yuan ($850 million) in capital. China’s EV makers are also set to face stiffer competition from global carmakers such as BMW, Volkswagen, and Tesla, which is setting up a manufacturing facility near Shanghai.