BYD Unleashes an EV Industry Reckoning That Alarms Beijing

The price war engulfing China’s electric vehicle industry has already sent share prices tumbling and prompted an unusual level of intervention from Beijing. The shakeout may just be getting started.

For all the Chinese government’s efforts to prevent price cuts by market leader BYD Co. from turning into a vicious spiral, analysts say a combination of weaker demand and extreme overcapacity will slice into profits at the strongest brands and force feebler competitors to fold. Even after the number of EV makers started shrinking for the first time last year, the industry is still using less than half its production capacity.