What China’s EV Graveyards Can Teach the EV Industry

China’s electric vehicle market is the largest and most competitive on the globe, attracting hundreds of electric vehicle startups and achieving an unprecedented rate of electric vehicle adoption. Significant government support, coupled with intense competition, has enabled EV prices in China to drop to unprecedented levels, resulting in a surge in EV purchases in China and the European market.

However, a flurry of reports over the past month has indicated that the world’s largest electric vehicle market is also home to graveyards for abandoned EVs. Recent news articles and videos have shown that thousands to tens of thousands of electric cars are currently abandoned in fields around Chinese cities, painting a potentially grim picture of the country’s swiftly growing EV market.

One particular “Chinese EV graveyard” featured on a recent Inside China Auto video showed a field full of abandoned BAIC BJEV EC3 and Neta V electric cars. Most of the EVs collecting dust in this and other electric vehicle “graveyards’” were abandoned by unsuccessful EV-related startups rather than everyday drivers.

More specifically, these graveyards are the resting places of electric cars used by the numerous ride-sharing and ride-hailing services that launched in the advent of the electric vehicle industry but ultimately folded. Thanks to the Chinese government’s extensive subsidies for electric cars, ride-hailing services that use EVs could procure many vehicles at relatively lower costs.

But, as numerous car-sharing companies across the country shut their doors in recent years, they left behind thousands of low-range electric cars that were deployed in cities. Many of the abandoned cars seem to have seen a fair amount of use. Some even show signs of significant damage, likely due to the fact that they weren’t properly maintained while still in service.

This wear and tear could be the reason why failed startups are struggling to offload their electric cars in a market that’s quickly becoming oversaturated with product. With at least half a dozen cities in China featuring an EV graveyard of some kind, it seems most ride-hailing and car-sharing startups were largely unable to sell their electric cars.

The other reason why most of these low-cost EVs aren’t selling is their relatively poor quality. A lot of the cars have less than 50 to 100 miles of range, and their performance is quite poor compared to other costlier but better-performing EV models.

Ride-hailing startups hoped to flood the market with up to 20,000 low-cost, low-range electric cars, but this decision is coming back to bite them now that higher-quality EVs with better performance are becoming more affordable. Moving forward, companies in the EV sector would be well served to invest in cutting-edge, high-quality EVs, especially if electric cars are a business investment as is the case for manufacturers such as NIO Inc. (NYSE: NIO). As innovation and technological advancements are key components of the global EV sector, companies that invest in subpar technology will be left in the dust.

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