China’s Car Dealers Face Existential Threat From EV Transition

China’s car dealerships are in urgent need of financial assistance as a long-running price war and rapid increase in production capacity for electric vehicles leave them struggling to survive.

The country’s transition to EVs has upended the traditional dealership model, where sales of gasoline cars from legacy manufacturers meant healthy profits, especially for the luxury segment, according to Cui Dongshu, Secretary General of the China Passenger Car Association. But the shift to electrification has brought overcapacity and intense competition that’s seen dealers slash prices — eating into the bottom line, he said.