BEIJING – Only 15 of the 129 electric vehicle (EV) and plug-in hybrid brands currently operating in China are projected to remain financially viable by 2030, according to a recent analysis by consultancy AlixPartners. This stark forecast underscores the intensifying competition and overcapacity within the world's largest automotive market, compelling a significant industry consolidation.

These 15 surviving brands are expected to command 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 vehicles, AlixPartners reported on Thursday. However, Stephen Dyer, head of AlixPartners' automotive practice in Asia, noted that consolidation in China might proceed more slowly than in other markets. This delay is attributed to local governments potentially propping up financially non-viable brands due to their importance to regional economies, employment, and supply chains.

“China is one of the most competitive NEV (new energy vehicle) markets in the world, with intense price wars, rapid innovation, and new entrants constantly raising the bar,” Dyer stated. He emphasized that while this environment has spurred remarkable advancements in technology and cost efficiency, it has simultaneously left many companies struggling to achieve sustainable profitability. Currently, only BYD and Li Auto among publicly listed Chinese EV makers have managed to report full-year profitability.

Despite calls from Chinese regulators to halt the ongoing price war, Dyer anticipates its continuation, albeit through more subtle mechanisms such as insurance subsidies and zero-interest financing, rather than direct price reductions. The severe market conditions are further evidenced by the capacity utilization ratio at Chinese car plants, which plummeted to an average of 50% last year—the lowest in a decade—exerting immense pressure on profit margins across the industry.