Xi Jinping (successfully) stimulated EV and semiconductor manufacturing through massive government investment and loans. The problem is that so many companies were funded that they are now viciously driving each other out of business through oversupply.
Because the supply chain networks are so dense, each bankruptcy easily cascades because the company then defaults on contracts with vendors and customers.
None of this, of course, is good news for US competitors like Tesla. With such a large field of vicious competition, it’s almost assured that the small set of businesses that succeed will be able to outcompete globally with extremely low cost structure. We see this happening with BYD.
Other than BYD (which has a strong product market fit and a very strong technical foundation in both battery tech and automotive development), where can the competition export?
Every major automotive market has preemptively or actively placed tariffs on Chinese automotive exports straight from China.
SAIC, GAG, GAC, BAIC, BYD, etc will all have to either ToT IP, open domestic factories, or create JVs in order to enter most markets.
BYD completely owns the Chinese EV market in absolute numbers - and the competitors had to preemptively begin exporting abroad, which sparked trade wars and worries of dumping, which made it harder for BYD and other players to export "Made in China" cars
You see, there is a 1.5m-2m new car market right next to China, completely abandoned by western players. And another 500k-1m market in Central Asia, where General Motors neocolonialist monopoly is waiting for disruption.
Of course it's not US or EU-sized market, but realistically, in the best case scenario I'd expect China to have at most 20% of US or EU. Here, they can take it all.