China’s EV price war crushed rivals by leaving 70% of its own car sales unprofitable

Years of steep price cuts on electric vehicles helped Chinese automakers outpace competitors in sales volume, but a Reddit thread citing fresh industry data suggests the approach may now be straining domestic demand.

What’s happening?

Around 70% of car sales in China were, at least at one recent point, reportedly not making money.

“China’s EV Price War Was Built On Cars Sold At A Loss,” read an Autoblog report, which also picked up attention on a Reddit post in the r/electricvehicles community, sparking hundreds of comments.

According to Autoblog, by early 2026, China was responsible for 32% of global auto sales, and its New Energy Vehicles accounted for 61% of the worldwide total.

China banned below-cost sales of new vehicles in February of 2026, helping to address this problem, and companies such as BYD, Geely, and Chery are reportedly pushing even harder into overseas markets for growth. That shift follows a worsening squeeze on profitability: Autoblog said auto-sector margins in China reached 4.4% in 2025 before falling to 3.2% in early 2026, while gross profit per vehicle slipped to about $2,000.

Why does it matter?

Intense competition has helped drive down EV prices, making it easier for more drivers to switch from gas-powered cars while saving money on fuel and maintenance.

But a market in which most sales lose money is difficult to sustain. If automakers keep burning cash, buyers could eventually face weaker warranty support, cost-cutting that affects quality, or industry consolidation that leaves them with fewer choices. The recent ban on below-cost sales could help stabilize the market, even if it slows the race-to-the-bottom pricing that first drew global attention.

At the same time, overseas expansion by Chinese brands could continue to put pressure on legacy automakers to offer better pricing, range, and technology.

What are people saying?

Autoblog framed the approach as a “hostile price war” built around a “scale-first” business model.

Commenters on the Reddit post also had plenty to say.

“While this is true to an extent, it’s not as if the legacy makers in legacy car making countries couldn’t have done the same and it’s not as if they didn’t have subsidies, too,” one wrote.

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