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Electric cars in China

China's EV overcapacity spurs global fears of more price cuts

Factory utilization for new energy vehicles drops to 50%, far below break-even point

Smartphone maker Xiaomi's entry into the EV market generated interest for its low prices.   © Reuters

BEIJING/TOKYO -- Electric vehicle production capacity in China continues to expand at breakneck speed despite being vastly larger than domestic demand, fanning fears that manufacturers will export vehicles abroad at cut-throat discounts.

The break-even point for factory utilization in the automotive industry is usually around 80%, but the level for new energy vehicles, which includes EVs, is only around 50% in China. Several emerging EV makers have already gone bankrupt due to overcapacity in the industry.

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