What threat? They are literally using abandoned production facilities by those local car makers.

The threat is that they expose the extreme short sightness of the leaders of those local car makers, who first ignored EVs and then decided only the upmarket models are sufficiently profitable for them (long before there was any serious price competition from Chinese brands). Let them feel the pain, apparently that’s the only way they learn.

P.s.: given that cars (incl. Individual EVs) are a relic of the past, it’s a structural adjustment we need to do sooner or later anyways. If the Chinese overcapacity can help in the transitional period, fine let them do it.