BEIJING (Reuters) -Only 15 out of the 129 brands that currently sell electric vehicles and plug-in hybrids in China will be financially viable by 2030, as intense competition forces consolidation and
Only 15 Electric Vehicle Brands in China Expected to Survive by 2030
BEIJING (Reuters) -Only 15 out of the 129 brands that currently sell electric vehicles and plug-in hybrids in China will be financially viable by 2030, as intense competition forces consolidation and some to exit the market, consultancy AlixPartners said on Thursday.
These 15 brands are projected to account for approximately 75% of China's EV and plug-in hybrid market by the end of the decade, each averaging annual sales of 1.02 million vehicles, AlixPartners said, without specifying brand names.
However, consolidation in China is expected to proceed more slowly than in other markets, said Stephen Dyer, head of AlixPartners' automotive practice in Asia, because local governments may support non-viable brands due to their importance to regional economies, employment and supply chains.
"China is one of the most competitive NEV (new energy vehicle) markets in the world, with intense price wars, rapid innovation, and new entrants constantly raising the bar," Dyer said.
"This environment has driven remarkable advances in technology and cost efficiency, but it has also left many companies struggling to achieve sustainable profitability."
China's automotive market, the world's largest, is currently facing a price war and significant overcapacity, both of which are straining profitability. Aside from BYD and Li Auto, no other publicly listed Chinese EV maker has achieved full-year profitability.
Chinese regulators have called for automakers to halt the price war. However, Dyer said it would likely continue, but through "hidden" factors such as insurance subsidies and zero-interest financing rather than direct price cuts.
The capacity utilisation ratio at Chinese car plants fell to an average of 50% in China last year, the lowest in a decade, pressuring profits, Dyer said.
(Reporting by Qiaoyi Li, Zhang Yan and Brenda Goh. Editing by Louise Heavens and Mark Potter)
