Eight Out of 10 of China’s NEV Brands Will Disappear by 2030 as Market Consolidates, Report Predicts

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A Zeekr 009 NEV on display at the 2024 Hainan Auto Show on July 11, 2024.

Eight out of 10 of China’s new energy vehicle (NEV) brands will disappear by 2030 as the market undergoes rapid consolidation, a global consulting firm predicts.

The number of Chinese NEV brands will fall from the 137 that exist now to only 19 in just seven years, according to AlixPartners’ annual Global Automotive Market Outlook released Wednesday.

To survive, an NEV brand needs minimum annual sales of 400,000 pure electric vehicles or 200,000 plug-in hybrid electric vehicles, the report suggests. In 2023, the average annual sales of China’s NEV brands stood at only 156,000 units.

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By 2030, 8 out of 10 of China's current 137 NEV brands will disappear, leaving only 19, dominating 70% of the market.
NEV brands need annual sales of 400,000 pure electric or 200,000 plug-in hybrids to survive; current average is 156,000 units.
Chinese NEV brands’ efficient development cycles contrast with foreign brands, aiding faster market adaptability and increased software update frequency.

AI generated, for reference only

Who’s Who

SAIC Motor Corp.: SAIC Motor Corp. is a major Chinese automaker that has joint ventures with Volkswagen AG in China. The company is involved in the country's rapidly evolving new energy vehicle (NEV) market, which is expected to undergo significant consolidation by 2030.

China FAW Group Corp. Ltd.: China FAW Group Corp. Ltd. is one of the joint venture partners of Volkswagen AG in China. It collaborates with Volkswagen along with SAIC Motor Corp. and JAC Group Holdings Ltd. FAW Group is engaged in manufacturing and producing vehicles in partnership with these firms, including electric vehicles, to adapt to the rapidly consolidating NEV market in China.

JAC Group Holdings Ltd.: JAC Group Holdings Ltd. is a Chinese automotive manufacturer that has joint ventures with Volkswagen AG. These collaborations enable JAC to produce a range of vehicles, including electric and hybrid models, as part of China's rapidly evolving new energy vehicle market.

XPeng Inc.: XPeng Inc., a Chinese electric vehicle maker, recently signed a long-term strategic partnership with Volkswagen AG. This collaboration is part of the broader trend of consolidation and strategic alliances in China's rapidly evolving NEV market. XPeng is positioned to be among the leading companies as the market is expected to consolidate from 137 to 19 brands by 2030.

BYD Co. Ltd.: BYD Co. Ltd. is mentioned in the article as one of China’s leading NEV companies, remaining highly profitable despite an ongoing price war in the market. The company is noted for aggressively cutting costs and increasing its EBITDA margins by 1.5% from the previous year. BYD's success highlights its competitive edge in China's rapidly consolidating auto industry.

Leapmotor: Leapmotor is a Chinese electric vehicle company that has entered a global joint venture with Stellantis, as mentioned in the AlixPartners report. The partnership highlights the increasing trend of foreign carmakers integrating with domestic Chinese companies to navigate the rapidly consolidating NEV market in China.

Volkswagen AG: Volkswagen AG has joint ventures with SAIC Motor Corp., China FAW Group Corp. Ltd., and JAC Group Holdings Ltd. in China. Recently, Volkswagen signed a long-term strategic partnership with Chinese electric vehicle maker XPeng Inc., showing its strategy to integrate with domestic companies through investments or partnerships as it faces market consolidation and intense competition in the Chinese NEV market.

Tesla Inc.: Early in 2023, Tesla Inc. initiated significant price cuts, sparking a price war among NEV brands in China. This price war led to similar actions by major Chinese brands. Tesla's move has highlighted the intense competition in the Chinese NEV market and the ongoing battle for market share, especially as leading companies like BYD Co. Ltd. remain highly profitable.

Stellantis: Stellantis has launched a global joint venture with China’s Leapmotor. The partnership is part of a broader trend where foreign automakers are engaging in strategic collaborations to navigate the rapidly consolidating Chinese new energy vehicle market. This follows similar moves by other foreign brands to adapt to competitive pressures and changing market dynamics.

AI generated, for reference only

What Happened When

Early in 2023：: Tesla Inc. ignited price cuts, followed by major Chinese brands.

2023：: The average annual sales of China’s NEV brands stood at only 156,000 units.

From March 2023 to February 2024：: Chinese electric vehicle startups released 40 over-the-air software updates, compared with 2 by global traditional automakers.