Two of China’s leading automakers, BYD and Great Wall Motor, are once again embroiled in a public dispute—one that highlights not just a deepening rivalry, but also the rising tension and structural unease within China’s rapidly evolving electric vehicle (EV) industry.

The latest flare-up began with remarks from Great Wall Chairman Wei Jianjun, who, in a recent interview, warned that “an Evergrande of the auto industry already exists—it just hasn’t collapsed yet,” an apparent reference to BYD’s financial strategy. BYD quickly fired back, referring to Great Wall as “a certain Hebei-based automaker,” and accused it of “malicious incitement and orchestrated whistleblowing.” The company pointed out that regulatory investigations found no wrongdoing. BYD’s head of branding, Li Yunfei, took to social media repeatedly to accuse Great Wall of “collusion, slander, and smearing tactics,” vowing to pursue legal action if necessary.

This is far from the first time tensions have boiled over. Since 2023, Great Wall has accused BYD of emissions violations and criticized its “moral posturing” as a business strategy. BYD, in turn, responded with reward campaigns for reporting unfair competition and an aggressive round of price cuts. Its latest promotional wave covers 22 smart-driving models, with discounts as high as 53,000 yuan ($7,300), a move widely seen as an attempt to undercut rivals and grab market share.

But the tactic is ringing alarm bells across the industry. The China Association of Automobile Manufacturers has warned that unchecked price wars are eroding profit margins, compromising product quality, and potentially harming consumer interests. Even the Ministry of Industry and Information Technology issued a rare statement, declaring that “there are no winners in a price war,” and pledging stronger oversight of what it called the “vicious cycle” of internal competition.

At the core of this dispute lies a strategic split between two philosophies. BYD, armed with vertical integration, massive R&D budgets, and an aggressive pricing strategy, has established formidable cost advantages. The company’s R&D spending reached 54.2 billion yuan ($7.6 billion) in 2024—far ahead of most of its peers. Great Wall, by contrast, has adhered to a profit-first model, emphasizing technology accumulation and brand positioning. But in a market increasingly driven by traffic, discounts, and consumer price sensitivity, this more cautious approach is under strain. In the first quarter of 2025, Great Wall’s net profit plunged 46% year-on-year, while its marketing expenses soared—signs of growing financial pressure.

What was meant to be a race of technology and innovation is morphing into a battlefield of verbal spats and price-slashing. Once seen as a cornerstone of China’s green transition, the EV industry is now facing a credibility challenge. Trade groups warn that today’s competitive frenzy is misallocating resources and threatening the sector’s long-term health.

The rivalry between BYD and Great Wall is unlikely to fade anytime soon. But the larger issue looms: with growth slowing, overseas markets still difficult to crack, and domestic demand increasingly insufficient to sustain every player, China’s auto industry is approaching a turning point. Whether it can pivot toward rules-based, orderly competition may ultimately determine its future.

The public feud between these northern and southern Chinese automakers may just be the beginning. The bigger question is whether the entire industry can chart a path forward in the face of mounting pressure.