That's just part of the story.

China has massively subsidized EVs in the last decade. Subsidies amounted to 45 billion dollars in 2023 alone. However it is true that subisdies are now reduced. This aligns with Chinas industrial policy: Subsidies are used to inflate certain sectors and once the state money dries up its survival of the fittest creating competitvly successful market leaders. Basically evolution on a makro economic scale. Perhaps a wise policy but the state wise hedging of markets is also part of the story.

/edit: Source https://www.csis.org/blogs/trustee-china-hand/chinese-ev-dilemma-subsidized-yet-striking

Well there is obviously a reason they dont do it, or you would see them doing it. Its just finding the reasons why at this point.