Vast Majority of Chinese Electric Vehicle Makers Unlikely to Survive Past 2030, Report Says

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Jul 7, 2025 - 09:53 Updated: Jul 7, 2025 - 02:08
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Vast Majority of Chinese Electric Vehicle Makers Unlikely to Survive Past 2030, Report Says
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News Analysis
In an increasingly overcrowded Chinese zero-emission vehicles (ZEVs) market, only a handful of companies will survive the destructive forces of competition and remain by 2030, according to a new annual Global Automotive Outlook report by global consulting firm AlixPartners.

The report forecasts that only 15 out of China’s 129 currently operating ZEV brands will become financially viable and survive by 2030.

It also highlights some of the key features of China’s “New Operating Model” for ZEV automakers, including faster speed to market, with 40–50 percent less investment and a 30 percent cost advantage. These features, the report says, will enable Chinese automakers to control nearly two-thirds of the domestic market and capture 10 percent of the European market share by 2030.

However, the report emphasizes that gaining market share at home and abroad may not be enough for most Chinese ZEV makers to be financially viable and survive the intense competition. The industry in China refers to ZEVs as NEVs, or “new-energy vehicles,” in accordance with China’s national policies.

“China is one of the most competitive NEV markets in the world, with intense price wars, rapid innovation, and new entrants constantly raising the bar,” Stephen Dyer, Asia leader of automotive and industrial practice at AlixPartners, said in the company’s release.

“This environment has driven remarkable advances in technology and cost efficiency. But it has also left many companies struggling to achieve sustainable profitability.”

NEVs refer to a wider subset of vehicles than ZEVs, which refer specifically to battery electric vehicles (BEVs) and fuel cell electric vehicles (FCEVs). NEVs include plug-in hybrid electric vehicles (PHEVs), which run on both electricity and gasoline.

Subsidies

The primary reason behind the intense competition in China’s ZEV market could be government policies that subsidize domestic ZEV manufacturers. 

“Despite ongoing price competition, Chinese NEV brands are leveraging cost advantages and non-price incentives such as insurance subsidies, cash rebates, and zero-interest financing to maintain market share and support consumer affordability,” AlixPartners said.

However, aggressive pricing is making it difficult for any market participant to generate or sustain profits over the long term.

Shanghai-based NIO Inc.’s financials serve as a good demonstration of the dire situation that most Chinese ZEV makers are facing. According to Gurufocus.com estimates, NIO’s current return on investment capital (ROIC), a measure of how effectively a company allocates capital in pursuing business opportunities, is -39.65 percent. At the same time, the company’s weighted average cost of capital, which finances its investments, is 9.02 percent.
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This gap indicates value erosion for stockholders, including local governments that directly or indirectly hold stakes in the company. As a result, its net profit margin has remained in negative territory over the past five years, indicating the company is incurring losses.
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XPeng’s financials provide another example of inefficient capital allocation among Chinese ZEV makers. XPeng’s ROIC is currently -14.41 percent, well below its weighted average cost of capital of 12.76 percent. As a result, it has also been reporting negative profit margins in recent years.

Export Barriers

Dyer sees the destructive forces of competition becoming worse as growth slows in the domestic market and trade barriers constrain overseas expansion.

To survive in this new competitive landscape, he believes Chinese ZEV makers must build strong brands, invest in advanced technologies such as autonomous driving, and localize their operations in key international markets.

“Only those who can adapt quickly, scale efficiently, and navigate both domestic and global headwinds will continue to thrive on the world stage,” Dyer said.

Patrick Peterson, auto expert and team lead at software and automotive data company Goodcar.com, finds the report’s forecast for 2030 realistic.

“China’s EV market is crowded right now, with well over 100 brands competing, many of which are small players struggling to stay afloat,” he told The Epoch Times.

“The majority lack the scale, technology, or capital to remain competitive in the long run. When you factor in the price wars we’ve seen recently, which have squeezed margins across the board, it becomes clear that consolidation is inevitable.”

Peterson agrees with AlixPartners that only the “fittest” will survive: a handful of strong, well-capitalized companies that can consistently deliver innovation, meet production demands and maintain profitability.

“Brands like BYD and Tesla are already operating at that level. Others, like XPeng and Li Auto, are still in the game but even they’re facing pressure,” he said.

However, Peterson expects the consolidation process to unfold at a relatively slow pace, as local governments continue to support regional brands—even when the economics don’t make sense.

“That could slow down the shakeout a bit, but I don’t think it'll stop it. The market is maturing, and with maturity comes fewer, stronger players. Whether it’s 15 or slightly more, the trend is clear: the window for smaller EV brands in China is rapidly closing,” Peterson said.

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