Turmoil in China's EV market could accelerate the transition

Beijing should not intervene in a shake-up that can do EVs good

- ANJANI TRIVEDI

Chinese automakers are repeating their past follies. That may be a good thing. As electric vehicles (EVS) eat into the market share of their traditional peers, carmakers in China are aggressively cutting prices to lure buyers. That looks like the beginning of yet another bust-boost-boom cycle: a period of flailing demand, followed by incentives to stimulate buying, and then, hopefully, sales surge.

The boost part, though, is looking a bit tenuous for both established and EV firms. While China's central government hasn't stepped in with overarching policy-backed incentives for the wider auto market, as it did in the past, local authorities are rolling out subsidies for car buyers as well as manufacturers. Car companies are throwing in sweeteners, while incumbents are trying to clear stocks of internal-combustion-engine vehicles that consumers will soon shun. EV makers, on their part, are trying to keep up with falling prices and rising competition.