China’s Ministry of Industry and Information Technology has concluded that BYD Co. and Chery Automobile improperly collected a combined $53 million in state subsidies intended to promote electric and other new-energy vehicles. The findings cover claims made between 2016 and 2020, when the two companies accounted for nearly 60% of all ineligible reimbursements identified by the audit. Overall, regulators said 21,725 vehicles failed to meet mileage or other technical thresholds required for support, generating 864.9 million yuan ($121 million) in wrongful payments. Of those, 7,663 units were attributed to Chery and 4,973 to BYD. The ministry did not specify penalties, but previous guidance requires manufacturers to repay funds tied to non-compliant vehicles. Any claw-backs would add pressure to an industry already burdened by excess capacity and an intensifying price war following the phase-out of most purchase incentives at the end of 2022.