- Only 19 of the 137 Chinese EV brands currently operating will still be in profit by 2030, experts predict.
- China’s two-year-long domestic price war has decimated the margins of weaker firms, forcing some out of business.
- Workers in Chinese EV plants can do six times as much overtime as other auto workers, Alixpartners report says.
Western automakers’ fear of the fast-moving, aggressively-priced competition making its way over from China is well known. But less well known is that many Chinese EV brands are also feeling under pressure from other domestic players, and with good reason. Experts think only 1 in 7 of today’s firms will still be making money at the end of this decade.
There are currently a staggering 137 electric car brands operating in China, according to Alixpartners, but the consultancy’s analysts think just 19 of them will be turning a profit by 2030.
Related: China’s WM Motor Files For Bankruptcy, Seeks To Reorganize
The high rate of predicted attrition is due to the brutal price war that has been running for the past couple of years in China’s domestic market and shows no sign of letting up.
Dominant firms like BYD have the kind of margins that allows them to push prices down again and again, squeezing the pips out of rivals whose margins aren’t so chunky, but who are forced to cut their own prices to stay in the game.
The price war has already hurt some Chinese brands, including WM Motor, which filed for bankruptcy in 2023, and Alixpartners expects many more to follow.
Analysts predict that the brands unable to make a profit will be forced to leave the industry altogether or change tack and chase only a minor share of the car market, Bloomberg reports.
Meanwhile, the likes of BYD and Tesla will only strengthen their positions. Last month Alixpartners’ experts said they expected Chinese automakers to grab 33 percent of the global car market by 2030.
One jaw-dropping detail contained in the latest report concerns the amount of overtime Chinese workers can take on in car plants operated by new EV brands.
They can allegedly do as many as 140 additional hours every month, compared to a maximum of 20 for workers in factories making cars for legacy automakers.
