"EV sales make up just 4 percent of overall passenger vehicle sales of 23.7 million units, according to the China Association of Automobile Manufacturers."
Yup, definitely sounds like a bubble.
Smog is their main problem, and EVs are the solution. Exponential growth will continue. And I'm tired of these anti-EV/anti-Tesla articles from Bloomberg.
However, I disagree that this is a huge problem though because I assume the likely survivors of this would be comparatively well funded meaning that the size of the investments that will be wiped out is much less than the full 18B. Also, 18B is not actually a lot in a market that is probably going to be worth hundreds of billions. Arguably it's not actually enough for China to dominate here. E.g. VW is easily matching this with their own 50B worth of investments that they announced in the last years.Finally, companies with decent in house technology or some other edge are not worthless and might end up being acquired; meaning investors get some kind of return on investment. It's the weaker players without interesting technology or enough funding that are going to be wiped out first. If you invested in those, yes you will lose your money.
I'd be more worried about the ICE bubble of manufacturers that are failing to adapt to EVs. E.g. BMW seems to have a problem here and Toyota has been dragging its heels rolling out decent EVs as well and instead continue to invest in dead ends (in my view) like hydrogen or hybrid. There's a lot of captial locked up in companies like that as well as their suppliers. That's a much bigger bubble and I think countries like Germany where I currently live are going to have a very rough decade where lot of traditional companies are either going to scale down or disappear entirely. EVs seems to have been growing more rapidly than some of these companies hoped and this is already hurting them. In Germany there are thousands of companies employing hundreds of thousands of people that are going to be affected by that.
Bloomberg is not making a simple point. The article is titled as if there is, without a doubt, a bubble. When a bubble pops, everyone loses money and only the strongest companies survive. Many new entrants into a rapidly growing market, some of which get shaken out or acquired as the market grows and consolidates, does not constitute a bubble.
Your second paragraph is an argument against this being "an investment bubble".
I agree 100% with the last paragraph.
They are not the solution. They represent a specific way to mitigate the problem by reducing the output of a very specific type of emissions.
I'd argue that setting up a functioning mass transit network in urban areas does more to lower emissions than switching powertrains in personal vehicles.
Most people use bikes or electric bikes to get to the metro or for short journies (probably at a ratio of 2 to 1) but people still want cars.
In Shanghai and Beijing, you can get an EV instantly but there is a quota for how many new ICE cars are added each month which means you go on a waiting list.
Mass transit will help, but people are going to buy cars and drive regardless. EVs are clearly the solution to this problem.