Deflationary Pressures Bite as China Slashes EV Incentives
Beijing's decision to cut electric vehicle tax incentives is taking a heavy toll on China's auto market as deflationary pressures squeeze consumer spending and government support erodes. In June, Chinese EV sales tumbled 11% year-over-year to a million units, a steeper decline than in global EV markets, which grew 7% during the same period. The weakness extended across the first half of 2026, with China's EV sales dropping 14% to 4.9 million units while global sales climbed to 9.6 million units with just 2% growth. Multiple economic forces are driving the market collapse in China. Beijing cut its EV purchase tax break that had shielded buyers…