China’s electric vehicle industry is overflowing with entrepreneurs and engineers locked in a relentless fight for market share — a dynamic that will keep price wars raging, according to prominent China watcher Dan Wang.

Wang, who lived in China from 2017 to 2023 as a technology analyst at Gavekal Dragonomics, now serves as a research fellow at Stanford University’s Hoover Institution. His debut book, Breakneck: China’s Quest to Engineer the Future, was released in August.

“There are simply too many founders, too many engineers, and too strong an incentive for local governments to back their own champions,” Wang said, adding that this structural overcrowding is why the pricing battle is unlikely to ease anytime soon.

He noted that while fierce rivalry has driven China’s dominance in sectors like solar energy and electric vehicles, it has also left many firms operating with razor-thin margins. “Brutal competition has produced some of China’s biggest successes,” he said. “But it’s also why so many of these industries struggle to earn profit.”