China's EV market faces slump; domestic sales fall 20% as price war intensifies

China's electric vehicle market is contracting, with domestic sales dropping 20% in H1 2026, marking the first anticipated full-year decline since 2020. An intense price war and reduced government subsidies are eroding profitability, with the industry's average margin falling to 3.8%. In response, automakers are aggressively pursuing overseas growth, boosting exports by 71%.