"The picture is not pretty. Already, fierce competition among automakers has gotten ruthless, with about 50 automakers fighting for customers by slashing prices again and again. Manufacturers facing ruinous losses are struggling to pay the companies that supply their parts. And yet they keep borrowing from state-run banks to build more factories, leading to extensive overcapacity.
Even BYD, the world’s largest E.V. maker, is now running into trouble. It said on Friday that its profits fell by almost a third in the spring compared with a year earlier because of price competition.
Overcapacity and price wars are a chronic problem across China’s economy. Debt-fueled investment pours into a succession of government priorities. This creates a glut of companies and factories that battle for a limited domestic market."
Profits of BYD falling 33% is staggering. Problems are not brewing.. they are leading to real effects already.
https://www.nytimes.com/2025/09/02/business/china-electric-vehicles-overcapacity.html