Only 15 out of the 129 brands currently selling electric vehicles (EVs) and plug-in hybrids in China are likely to remain financially viable by 2030, according to a report released Thursday by consultancy AlixPartners. The firm said these surviving brands are projected to command about 75% of the Chinese EV and plug-in hybrid market by the end of the decade, with each brand expected to average annual sales of 1.02 million units.
AlixPartners did not disclose the names of the projected surviving brands. However, publicly listed EV manufacturers such as BYD and Li Auto are currently among the few that have posted full-year profitability in the Chinese market.
Stephen Dyer, head of AlixPartners’ automotive practice in Asia, said that industry consolidation in China would progress at a slower pace than in other regions. He attributed this to local government support for smaller, financially unviable brands, citing their importance to regional economies, employment, and supply chain continuity.
China, the world’s largest automotive market, continues to grapple with intense price competition and industrial overcapacity, both of which are putting pressure on automakers’ margins. In 2023, the average capacity utilisation ratio at Chinese vehicle factories dropped to 50%, the lowest level recorded in a decade, according to AlixPartners.
Although Chinese authorities have urged automakers to avoid open price wars, competitive pressures are expected to persist. Dyer said pricing strategies are likely to shift away from direct cuts to indirect incentives such as insurance subsidies and zero-interest financing.