The problem is that China has subsidized these vehicles to produce them below cost.
I agree with what you said, with a little semantic disagreement that the cars are sold below the actual cost but are produced below the unsubsidized cost.
There are two significant motivations for the Chinese to dump these cars below cost.
First, dumping devastates foreign manufacturing, which projects Chinese economic and soft political power while weakening competitor countries. It's perhaps ironic that the dumping intended to hurt foreign competitors is also hurting the Chinese companies themselves. By selling cars below cost to whitewash corporate reports, the companies move large amounts of revenue but hurt the intrinsic strength of each company. The only way a company can justify this suicidal strategy is to convince itself that it will survive the bloodbath while its competitors will go out of business.
Second, China is in the midst of a generational real estate crash that risks paralleling the 30-year Japanese deflationary period. Instead of attacking bad loans like the US and European countries have done, China has decided to export their way out of the crisis. This is an existential dilemma. China has been trying to pivot to the more stable domestic consumption-based economies of the West, but the real estate crisis interrupted that momentum. Unfortunately, China has been squandering the vast foreign reserves from trade surpluses to further feed the export engine instead of infusing that money into local consumption. As a result, China's export numbers mask the underlying weakness of the domestic economy.