How China’s EV boom spun dangerously out of control

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China’s electric vehicle industry is often held up as proof that the central government successfully engineered global champions through massive subsidies. But for the likes of dominant players BYD, Zhejiang Geely Holding Group and Chery Automobile, breakthroughs came after years of decentralised experimentation and ferocious competition.

That process created a fragmented market plagued by too many players producing too many cars — a problem that will be difficult to resolve. Nowhere is this more apparent than in Beijing’s relationship with Brussels. A year after winning a tariff war with the US, China is on the cusp of a similar conflict with the European Union.

Efforts to offset a sluggish domestic market with overseas growth is a major source of tension. The EU’s trade deficit with China has reached more than $US1 billion ($1.5 billion) a day, sparking worries about long-term industrial decline. Chinese models overtook sales of Japanese vehicles there for the first time in May, despite tariffs imposed by the bloc two years ago. EU and Chinese officials have given themselves until October to produce a joint plan to........

© WA Today