> BYD is eating Tesla for lunch
For some reason my Youtube echo chamber is trying to convince me that BYD makes so many cars but cannot sell them. It's really bizarre. Other things it's trying to convince me of "Don't get an electric car. Period", "Ukraine won. Done deal", "Trump is devastated" about something else every day. Yes I do want the latter two to be true and it's playing on that but I don't get the BYD thing.
There's not really NEV oversupply, the EV adoption curve will keep shooting up from 50% to 100%, many PRC EV companies will die from competition/pricewar consolidation not broader oversupply, since EV industrial base is still undersupply relative to 100% adoption curve.
Oversupply is in legacy ICE displacement due to rapid domestic EV penetration. "Zero-milage used car" accounting trick is primarily to export excess capacity of gasoline cars (now that EV has taken over) that aren't moving domestically anymore. MOST of PRC exports are ICE, IIRC 60-80%, there's plenty of global demand for ICE still. Pushing domestic sku new car with crushed domestic demand as "used" exports where there's plenty of demand = meet sales target, but less through discounts but import fees engineering - used cars circumvent import duties, certifications, warranty requirements etc. It's a lifehack to unload domestic ICE inventory, not EV. This also likely transient effect because NEV transition in PRC happened so fast ICE manufacturer that target domestic market caught flat footed. They need a few years to either retool to EV or shift primarily to target export markets that still has appetite for affordable gasoline cars.
The Reuters article focuses on exports because that's what their target audience is likely to be interested in, but the People's Daily article they reference in passing https://paper.people.com.cn/rmrb/pc/content/202506/10/conten... is treating it as a domestic problem, highlighting the appearance of "zero-mileage used cars" on the second-hand market, specifically calls out EV companies for putting quantity over quality, and floats stimulating used car exports as part of the solution.
Also, at least the EU doesn't distinguish between new and old cars when importing from outside the EU https://taxation-customs.ec.europa.eu/buying-and-selling-car... presumably precisely to avoid creating the kind of loophole you imagine exporters are exploiting. But they aren't; they just hurt their own profitability to juice their numbers and chase growth.
Domestic problem as in domestic involution problem not a EV overcapacity problem. I'm pointing out important to distinguish between ICE and EV, ICE is structural overcapacity, EV is under capacity but involution. ICE zero mile shenanigans is to liquidate/ unload excess inventory that doesn't have demand in PRC, mostly targeting loopholes in russia, central asia, mena. There's (less regulates) markets other than EU.
BYD/EV zero mile hack is more for subsidy harvesting, they're trying to dip on domestic subsidies for new sales then skip on stuff like servicing/warranty because used sale, i.e. shady involution behavior that abuse national policies, hence crackdown. It's not because EV are excess capacity, but so many EV players involuting and accountants find creative ways to carve margin. It's not EV sector makes 100 cars can only sell 50, because overcapacity, so discount to sell 100. It's EV sector makes 100 cars, sell 100 @1% margin but with some engineering they sell 100 @2% margin.
Yes, there are some brands that does use it for price cuts, premium brands, i.e. nio/xpeng, who won't lower sticker price, so they have to flip to lower price in used market. But that's also less overcapacity, more PRC EV moving so fast last few years no one wants 12 month old models. AKA tech stack progressing so fast / involution pressures so hard consumers won't pay sticker for anything older than 1 gen. What happens PRC manufacturing turns car cycles into phones obsolescence cycles. The broader the point here is EV makers are generally not doing accounting tricks to sell more cars due overcapacity / lack of demand (what over capacity implies), they're doing accounting tricks to sell the same amount of cars to make their razer thin involution margins slightly less razer thin, at the expense of the government.
BYD is selling a lot of cars, but they're also making a lot more cars than they can sell at sticker price in China, as does every other Chinese car company. This oversupply leads to all kinds of distortions, like dealerships registering cars as "sold" to make their sales targets and then selling those brand-new cars as "used" at a discount. https://www.reuters.com/business/autos-transportation/local-...
Maybe your YouTube echo chamber additionally thinks that this will cause BYD to collapse, but I doubt that. There are about a hundred Chinese EV manufacturers in worse financial shape, who're likely to go bankrupt first, which should reduce oversupply enough for BYD to survive.