Only 15 out of the 129 electric vehicle (EV) and plug-in hybrid brands currently operating in China are expected to remain financially viable by 2030, according to global consultancy AlixPartners.
These surviving brands are projected to dominate roughly 75% of China’s new energy vehicle (NEV) market by the end of the decade, each achieving average annual sales of around 1.02 million vehicles. The firm did not name the brands it expects to survive.
Despite the scale of consolidation forecast, AlixPartners noted that the process will likely unfold more slowly in China than in other global markets. This is largely due to local governments continuing to support unprofitable automakers for their roles in sustaining regional economies, employment, and industrial supply chains.
“China is one of the most competitive NEV markets in the world, with intense price wars, rapid innovation, and new entrants constantly raising the bar,” said Stephen Dyer, head of AlixPartners’ automotive practice in Asia.
While the environment has led to rapid advancements in cost efficiency and EV technology, Dyer warned that many firms are still struggling to reach sustainable profitability.
China’s EV sector, the largest in the world, is currently grappling with a harsh price war and significant overcapacity — both of which are undermining margins. Except for BYD and Li Auto, no other publicly listed Chinese EV manufacturer has posted full-year profits.
Although Chinese regulators have urged automakers to halt price-cutting tactics, Dyer said such practices are likely to persist in subtler forms, such as insurance incentives and zero-interest financing.
Adding to the financial strain, capacity utilisation at Chinese car factories dropped to just 50% in 2023 — the lowest in a decade — further squeezing profitability, Dyer added.
