Many Chinese Electric Car Manufacturers Predicted to Collapse by 2030

KatadataOTO – Chinese electric car manufacturers are currently storming the four-wheeled vehicle market in various countries. From Asia to the European continent.

They offer various Electric Vehicles (EV) to consumers. Causing the sales of these Chinese companies to skyrocket.

As previously reported by KatadataOTO, Chinese electric car manufacturers dominate up to 76 percent of the global market share.

Europe is touted as one of the main destinations for many Chinese manufacturers to sell not only EVs but also hybrid models like Plug-in Hybrid Electric Vehicles (PHEV).

Photo : KatadataOTO

However, according to a recent Reuters report, it is said that many electric four-wheeled vehicle producers from the Land of the Bamboo Curtain will go bankrupt.

“Only 15 of the 129 brands currently selling electric vehicles and PHEVs in China will be financially strong in 2030,” the online media wrote on Monday (07/07).

In the report, consultancy AlixPartners said that intense competition is causing a number of manufacturers to run out of steam.

Therefore, they cannot survive and continue selling EVs and PHEVs to consumers in various locations.

Furthermore, AlixPartners said that the 15 surviving brands will control about 75 percent of the electric car and PHEV market share in China by 2030.

“Each will record average annual sales of 1.02 million vehicles,” they continued.

Unfortunately, AlixPartners did not specify in detail which brands will be able to survive at the end of this decade.

Price War is the Culprit

On the other hand, it was mentioned that there are a number of factors why many electric car manufacturers will fall by 2030.

One of them is the practice of a price war. Making the competition between manufacturers increasingly unhealthy.

“China is one of the most competitive NEV (New Energy Vehicle) markets in the world with a fierce price war, rapid innovation, and newcomers who continue to raise the standard,” said Stephen Dyer, head of AlixPartners Automotive Practice Asia.

Photo : Special

The price war phenomenon is said to bring more negative impacts than positive effects to manufacturers.

In addition, the issue of production overcapacity is also touted as a culprit for the damage to the EV industry in China.

“This condition has driven extraordinary progress in terms of technology and cost efficiency. But it makes it difficult for many companies to achieve sustainable profitability,” Dyer concluded.