Commentary: The Phantom Menace of Chinese Overcapacity

In July 2026, Volkswagen AG announced it might need to eliminate another 50,000 jobs, on top of an already agreed-upon 50,000 cuts across its core brands. As the world’s second-largest automaker, Volkswagen faces a brutal transition. The company cited rising European costs and new U.S. tariffs, but the true existential threat is the rise of globally competitive Chinese technology. Chinese automakers, particularly in the new-energy vehicle (NEV) industry, are building better cars at lower costs.