According to Alixpartners, out of the 137 EV brands currently operating in China, only 19 are projected to be profitable by the end of this decade.
Western automakers are well aware of the threat posed by rapidly advancing, competitively priced competition from China. However, lesser-known is the pressure many Chinese EV brands face from other local competitors, with good reason. Experts believe that only one out of every seven of today’s firms will remain profitable by the decade’s end.
According to Alixpartners, there are currently an astonishing 137 electric car brands active in China, yet analysts from the consultancy predict that only 19 of them will achieve profitability by 2030.
The anticipated high attrition rate stems from the intense price competition that has characterized China’s domestic market for the past few years, with no indications of easing.
Leading companies like BYD have substantial profit margins that enable them to repeatedly lower prices, putting pressure on competitors with thinner margins who must also reduce prices to remain competitive.
The price competition has already impacted several Chinese brands, such as WM Motor, which declared bankruptcy in 2023. Alixpartners anticipates that many others will face similar challenges.
According to Bloomberg, analysts foresee that brands unable to achieve profitability will either exit the industry entirely or shift focus to capturing a smaller share of the car market.
Meanwhile, powerhouse companies like BYD and Tesla are expected to strengthen their market positions. Alixpartners recently projected that Chinese automakers could command 33 percent of the global car market by 2030.
One striking detail highlighted in the latest report concerns the significant overtime hours Chinese workers in new EV brand car plants can reportedly undertake—up to 140 additional hours per month, compared to a maximum of 20 hours for workers in factories producing cars for traditional automakers.
