Only 15 of China's EV brands projected to stay viable by 2030, says AlixPartners
The 15 brands are projected to account for about 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.
"The 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 facing a price war and significant overcapacity 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 carmakers 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.
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