By Lauren Fix
Here’s a dirty secret that few are discussing. Thousands of electric vehicles abandoned as 90% of Chinese EV makers face bankruptcy. China may seem like the leader of the EV industry, but behind the scenes, there is a massive crisis unfolding. Hundreds of EV companies have gone bankrupt, leaving behind thousands of abandoned cars in fields and warehouses.
The shocking insights into the current state of the Chinese electric vehicle (EV) industry. Prepare yourself for a crisis alert as we uncover the unfortunate reality of thousands of abandoned EVs left to rest in what can only be described as an EV graveyard.
We explore the dire financial situation facing 90% of Chinese EV makers, pushing them perilously close to bankruptcy. The abandoned EV graveyard reflects the urgency and gravity of the situation. In recent years, China emerged as a dominant force in the EV market, boldly aiming to revolutionize transportation towards a sustainable future. However, our investigation reveals a harsh truth – the dream has turned into a nightmare for the majority of Chinese EV manufacturers. With alarming statistics depicting a staggering 90% of these companies teetering on the edge of financial collapse, it becomes evident that the consequences extend far beyond mere economic setbacks.
Thousands of once-promising EV and electric bikes now lie abandoned, symbolizing the aspirations that came crashing down. We delve into the root causes behind this crisis, shedding light on the factors that pushed these manufacturers to the brink, such as fierce competition, mismanagement, gaming the system and a weaker-than-anticipated demand.
What caused this collapse, and what does it mean for the future of electric vehicles in China and the world? Let’s take a look at the facts. Explore the history and the challenges of China’s EV market, and this reveals why 90% of Chinese EV makers are facing bankruptcy. The government, the consumers, and the technology are shaping this industry and this is basic business.
China has emerged as the global powerhouse in electric vehicle manufacturing and sales, but there might be a dark side to its rise. A recent video showcases enormous fields filled with thousands of abandoned Chinese electric cars. This is not fake footage – this is current drone footage. Some of these EVs appear to be the Geely Kandi K10 EV, Neta V, and BYD e3 models. These cars are seen parked in one of the districts of Hangzhou, the capital of the Zhejiang (SHÉ-SHĀNG) Province in eastern China.
The scene appears eerie as the white paint is tainted by layers of dust and tires partly covered by encroaching grass. Inside, they appear brand spanking new, as the plastic seat wraps are untouched and the screens still shining.
They all have registration plates. YouTuber Winston Sterzel, who re-shared the drone footage, alleges that Chinese EV makers register the cars and claim to have sold them to show numbers and obtain subsidies from the government.
One caption, translated to English, reads “BYD inventory flooded, 600 cars waiting to be processed.” In a related video, a registration form reveals the size of the plot where the surplus inventory is left to rust in Hangzhou. The field is over 15,000 square meters in size, and the nature of the property is “commercial business.”
The Atlantic reported similar incidents in 2018 in Shanghai, the country’s largest city and a global financial hub, but with regard to bicycles. The publication said that after bike sharing reached its peak in 2017 in China, supply vastly outpaced demand. The result was mountain-sized heaps of brightly colored surplus bicycles.
The abandoned cars may have undergone a similar fate. They reportedly belong to a failed car-sharing service called Microcity, which had thousands of Kandi 11 models, as documented by the Chinese state-owned newspaper People’s Daily. Multiple car-rental businesses failed during the same period in China, which could explain the existence of these car cemeteries.
Also, note that some of the drone footage is over two years old, while some local reports of cars lying abandoned are from 2019. It’s unclear what the current state of the EV graveyard is, and if any action was ever taken to bring these vehicles back to life.
As per reports by the Chinese media, the unused electric cars were seen parked alongside a river on the outskirts of Hangzhou. All the cars belong to an electric car sharing company called Microcity. The company claimed to the Chinese media that the cars are still in use. But when the media tried to book a ride through the company’s official app, no cars were available for rental in the vicinity.
A villager in the region was interviewed in the report, claiming that the company has been paying him 30,000 plus yuan (around $4,100) per year since last July for the parking area.
But there is more, China’s new EV subsidies might not be enough to bolster slowing growth. One of the few detailed stimulus plans Beijing has announced this year extends tax breaks for electric car purchases. However, tax breaks don’t resolve the fundamental reason why people in China haven’t bought more electric cars: mileage concerns. More than 70% of total public fast chargers are located in just 10 provinces. That’s only about a third of the country.
Chinese authorities have supported the growth of the domestic new energy vehicle market over the last decade in a bid to become a global player in the auto industry. China’s goal is to own the auto industry.
As for the video footage, I’m curious what percentage of already sold vehicles are abandoned in other countries. This is important information we need to know. I’m also curious whether the abandoned vehicles are actually functional, or whether some scam was involved. We may never know.
Lauren Fix, The Car Coach®, is a nationally recognized automotive expert, analyst, author, and television host. A trusted car expert, Lauren provides an insider’s perspective on a wide range of automotive topics and aspects, energy, industry, consumer news, and safety issues.
Lauren is the CEO of Automotive Aspects and the Editor-in-Chief of Car Coach Reports, a global automotive news outlet. She is an automotive contributor to national and local television news shows, including Fox News, Fox Business, CNN International, The Weather Channel, Inside Edition, Local Now News, Community Digital News, and more. Lauren also co-hosts a regular show on ABC.com with Paul Brian called “His Turn – Her Turn” and hosts regular radio segments on USA Radio – DayBreak.
Lauren is honored to be inducted into the Women’s Transportation Hall of Fame and a Board Member of the Buffalo Motorcar Museum and Juror / President for the North American Car, Utility & Truck of the Year Awards.
Check her out on Twitter and Instagram @LaurenFix.
Anyone have location of one of the “parking lots” so we can see on Google Earth?