The biggest hurdle for electric car manufacturers in China is the risk of running out of funds. The competitive nature of the market demands heavy investments in research, development, marketing, and battling price wars, making it difficult to maintain profitability.
However, China’s EV industry has flourished due to a combination of government backing, technological advancements, and entrepreneurial spirit. The country’s emphasis on transitioning towards electric vehicles incentivized consumers with subsidies and easier registration, leading to a surge in production.
The availability of market-based financing propelled China’s EV sector’s growth. Investors saw potential in the industry, providing ample capital to companies in the supply chain. Start-ups received significant funding, attracting investors eager to support innovative and eco-friendly ventures.
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