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 units, 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 continue supporting non-viable brands due to their importance to regional economies, employment and supply chains.
China, the world’s largest automotive market, 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 makers have achieved full-year profitability.
Chinese regulators have called for automakers to halt the price wars. However, Dyer said that the war would likely continue, but through “hidden” factors such as insurance subsidies and zero-interest financing rather than direct price cuts, he estimated.
Capacity utilisation ratio at Chinese car plants has fallen to an average 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)
Comments