China’s booming electric vehicle (EV) industry is now battling shrinking profit margins and overcapacity, threatening the survival of most brands.
According to market data, China currently has 129 EV brands, yet fewer than 10% are projected to be profitable by 2030. In the best-case scenario, only 15 automakers will survive, controlling about 75% of the domestic EV market.
The rest risk collapse, with many already on the brink. Reports show that some brands sell fewer than 1,000 cars per month, making it impossible to recover costs.
China’s annual EV production capacity stands at 20 million units, but only half was used last year — about 10 million cars. Fierce price wars, fueled by deep discounts, tax exemptions, trade-in bonuses, and zero-interest loans, have worsened the situation.
Currently, only three Chinese EV companies are profitable:
- BYD, the market leader
- Li Auto, a rising competitor to Tesla
- Aito, backed by Huawei
The rest are “bleeding cash.”
Beijing has tried to curb discounting, even threatening penalties, but the root problem of overcapacity remains.
