US consulting firm AlixPartners announced on July 10 that the number of Chinese electric vehicle brands may decrease from 137 in 2023 to 19 in 2030, a reduction of over 80%.
AlixPartners made this prediction in its annual “Global Automotive Market Outlook” released on the 10th of July.
According to the report, based on the sales experience of Tesla and Chinese electric vehicle brand NIO, a brand in the electric vehicle industry would need to achieve an annual sales volume of 400,000 pure electric vehicles or 200,000 plug-in hybrid electric vehicles to survive. However, in 2023, the average annual sales volume of Chinese electric vehicle brands was only 156,000 units.
AlixPartners forecasts that if the concentration of China’s new energy vehicle market in 2030 reaches the level of the internal combustion engine vehicle market in 2020, these 19 brands will occupy over 70% of the market share, with each brand achieving an average annual sales volume of 835,000 vehicles. The remaining 118 brands would have an average annual sales volume of 46,000 units, making it economically unsustainable.
Stephen Dyer, head of AlixPartners’ automotive and industrial practice in the Asia-Pacific region, commented to CaixinNet, “This year, we have already seen two or three Chinese new energy vehicle companies go bankrupt, and the possibility of mergers between state-owned enterprises and private enterprises exists in the future.”
Zhang Yichao, partner of AlixPartners’ automotive consulting business in Greater China, also believes that the automotive industry is closely related to the economic development goals of various regions in China. Local authorities will play a certain role in this round of consolidation, leading to the emergence of major automotive groups in various regions of China.
Dyer also pointed out that the intensifying price war in China is behind the consolidation of the auto market. In early 2023, Tesla initiated a new round of price wars in China, leading various brands to follow suit, and there are no signs of it ending yet.
This is the 21st year that AlixPartners has released the “Global Automotive Market Outlook” report.
Regarding AlixPartners’ forecast, some mainland netizens expressed that the predictions might be a bit too optimistic.
One netizen commented on CaixinNet on July 11, “Still too optimistic.”
Another netizen, “Xu Feng – Slow Reply to Ban Electricity,” also agreed, saying, “Too optimistic…”
User “Chopping Firewood Man 2” expressed skepticism, “Seems a bit too optimistic? Probably 80% won’t survive past three to four years.”
User “Ding Man” said, “Be bolder, considering the addition of new brands and brands that will be acquired, won’t the elimination rate be more than 90%?”
And “Piano Wine Enthusiast” believed, “There is no need to wait until 2030, be bold, maybe it will only take three years in the future.”