Core Viewpoint - The increasing competition in the domestic market, particularly in the booming electric vehicle sector, has led to a price war that benefits consumers in the short term but poses long-term risks to companies, employees, and the overall economic ecosystem [1][3][21] Group 1: Impact on Labor - Intense competition has severely affected workers' income and working conditions, with companies often resorting to cost-cutting measures that exploit labor [3][4] - For instance, a leading battery manufacturer has been reported to implement an "896" work schedule, which translates to working from 8 AM to 9 PM, six days a week, with periods of continuous work lasting up to 100 days [4][6] - Despite the impressive growth in the electric vehicle sector, with production and sales reaching 12.888 million and 12.866 million units respectively in 2024, this growth has not translated into better conditions or pay for frontline workers [3][4] Group 2: Profitability Issues - The internal competition has resulted in generally low profit margins for manufacturing companies, with the total profit for large-scale industrial enterprises in China declining by 3.9% in 2024, totaling 55,141.1 billion yuan [6][10] - The operating income profit margin for the manufacturing sector was reported at 4.64% in 2024, indicating a challenging environment for profitability [6][10] Group 3: Consequences of Internal Competition - The phenomenon of "internal competition" has led to a reliance on low-cost labor, which is not sustainable in the long run and undermines the quality and technological advancement of products [6][12] - Companies are increasingly seeking "off-balance-sheet profits," engaging in activities that do not directly reflect their core business, which can lead to financial instability [13][14] - The rise of "supply chain finance" has become a common practice, where companies focus on capital operations rather than product quality, further exacerbating the issue of internal competition [14][15] Group 4: Regulatory Responses - Recent actions have been taken to address the issue of internal competition, such as halting below-cost bidding in the photovoltaic sector and encouraging mergers and resource consolidation in the semiconductor industry [21] - Major electric vehicle manufacturers have committed to reducing payment terms to suppliers to mitigate risks associated with supply chain finance, which could help stabilize the industry [21]