China's auto industry has the capacity to build 40 million vehicles per year, about twice as many as are sold in the nation each year. That has led to other countries considering imposing extra taxes to protect their own automakers as China's companies look to exports. Meanwhile, the Chinese government continues to fund the industry, as it seeks to secure jobs and support economic growth.
That has pushed EV makers into a vicious price war, as they try to win over buyers who are spoiled for choice. Unsurprisingly, automakers are eager to explore new markets, leading to a quintupling of China's auto exports between 2020 and 2023. Many of these gains were achieved in Russia, where Chinese automakers stepped in following the Eurasian nation's conflict with Ukraine, which resulted in trade embargoes from the U.S. and its allies.