#2-28 China's strategy of creating excess capacity in the battery electric vehicle (BEV) and autonomous driving (AD) sectors

China's strategy of creating excess capacity in the battery electric vehicle (BEV) and autonomous driving (AD) sectors, drawing parallels to its past approach in the steel industry. The texts highlight how this leads to fierce domestic competition, low profitability for many manufacturers, and aggressive export drives causing international trade friction, particularly tariffs. They explain that while this benefits consumers with lower EV prices, it poses a significant challenge to global automakers, forcing them to adapt through cost reduction, technological innovation, and strategic partnerships. The sources also emphasize the synergy between BEVs and AD technology as a new element allowing China to compete on both price and advanced features, potentially influencing global technical standards and supply chains and escalating geopolitical tensions surrounding economic security.

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