A Few Thousand Teslas Won't Fix China's Problems
The debt troubles of Tianqi Lithium, an electric-car battery supplier, show the enduring mismatch between supply and demand.
Electric slide.
Photographer: Qilai Shen/BloombergTianqi Lithium Corp. had everything going for it: generous subsidies, Beijing’s blessing on the electric-vehicle industry it supplies, and the hype of Tesla Inc. getting its sedans off the production line in China. The only thing interrupting this nice fairy tale is the reality of demand and making money.
Over the past few years, China has supported its electric-car industry by doling out large subsidies; giving preferential treatment to domestic companies; and providing large outlays for charging infrastructure. The sector has surged as a result. The kickoff of Tesla’s Model 3 in Shanghai last month sparked a fresh rally among producers of lithium – a key ingredient in batteries – and other suppliers.