China’s intense price war has triggered an unprecedented reshuffle in the electric vehicle industry. Companies like Weima and NIO have gone bankrupt one after another, leaving millions of car owners stranded in a post-sales quagmire.
Public information shows that in 2018, there were over 487 electric vehicle manufacturers in China, but by the end of 2023, only a little over 40 are still operational.
According to incomplete statistics from “Yicai,” over the past decade, the bankruptcies of these companies have affected millions of car owners. What used to be the responsibility of the companies, such as after-sales service, has now become a headache for the car owners. With these companies exiting the market, the new energy vehicles in the hands of owners have become ‘discontinued models,’ facing challenges such as warranty becoming void, difficult to find maintenance parts, and even the inability to purchase car insurance.
“Even though the car is still there, the post-sales support is gone,” said Mr. Yao, a resident of Wenzhou, to “Tide News.” He bought a Weima new energy vehicle in 2019, only for Weima to declare bankruptcy in 2023. Subsequently, the car started facing various issues – minor battery failures, window regulator malfunctions, central control display going dark, turning into a mere brick. What’s even more troubling for Mr. Yao is the abnormal degradation of the power battery, with the mileage dropping from 520 kilometers to just 200 kilometers.
“The authorized service centers have long been closed, and no one answers the customer service phone. The company’s warranty promise became an empty promise,” Mr. Yao said, adding that he had to seek external repair shops which not only charged exorbitant prices but also struggled to fix the issues permanently, resulting in multiple repairs.
In despair, Mr. Yao recently purchased a sticker online that reads, “Don’t touch me, it’s a nightmare to repair my car,” and pasted it on his vehicle.
There are many other car owners who have faced similar situations. As reported by CCTV on October 27th, Mr. Zhang from Chaoyang District in Beijing purchased a Weima EX6 new energy vehicle for 200,000 yuan in 2020. Since Mr. Zhang’s car model had low sales, parts were scarce, and third-party repair shops had trouble dealing with core components like the motor.
“It took half a year just to ‘possibly’ have a front bumper available. I even had to scavenge for spare parts from dismantled cars on second-hand platforms to repair my car,” Mr. Zhang said. “Especially for the three-electric systems, repair technicians mentioned that only the original manufacturer could accurately diagnose the issues. Tampering with the battery poses too many risks, like fire hazards and legal liabilities.”
After the companies shut down, Mr. Zhang became a ‘semi-mechanic’ himself. “In the car enthusiasts’ group, we often share tutorials on changing door handles, tires, and exchange information about spare parts,” he said, adding that the group initially had over 200 members but now only about 60 remain as most have sold their cars for new ones.
Recently, Mrs. Wang, a NIO car owner in Taizhou, consulted three insurance companies to inquire about insuring her vehicle for damages and other commercial insurance. However, none of the insurance companies gave a definitive answer.
“One insurance company mentioned that they could consider coverage with increased premiums or reduced coverage limits, considering the scarcity of parts which may lead to insurance disputes,” Mrs. Wang told Tide News, expressing her reluctance to drive the car without commercial insurance, leaving her vehicle essentially ‘naked’ on the road.
According to Li Hua, a pseudonym for an insurance worker involved in car insurance, insurance companies generally lower their ratings and automatically block insurance applications for companies with abnormal operations. Li Hua explained that post-companies shut down, the breakdown of the repair chain increases the insurance companies’ claim risks. “Once the core components stop being produced and there’s a shortage during a claim, it can easily lead to uncontrollable claim costs.”
The “Regulations on Automobile Sales Management” stipulates that suppliers should promptly announce the discontinuation or cessation of sales of models to the public, ensuring at least ten years of parts supply and related after-sales service.
Despite the regulation, with dealerships closing down and companies liquidating, they are no longer able to provide parts and after-sales service.
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