Expert Say Few Chinese EV Makers Will Be Profitable By 2030

It seems not all Chinese EV makers will turn into profitable entities by end of the decade say experts at Alixpartners.

Just 19 out of 137 electric vehicle (EV) manufacturers currently active in China will become profitable entities by 2030, reportedly say experts at consultancy firm Alixpartners. That’s roughly a ratio of just 1 in 7.

This is perhaps a much lesser known issue many Chinese EV makers face as pressure mounts on them both domestically and abroad. This predicted high attrition rate stems largely due to the brutal price war running over recent years in China’s domestic market, which shows no sign of waning.

Alixpartners experts also reckon that powerhouses like BYD posses massive margins that enable them to lower their prices several times. In turn, this will allow them to exert more pressure against rivals who don’t necessarily possess similar margins but are forced to lower their prices nonetheless.

To date, the price war has already driven a number of Chinese EV makers into bankruptcy – i.e. WM Motor – and Alixpartners experts reckon more will follow suit. In fact, analysts believe unprofitable brands will be forced out of the market completely, or be relegated with a minor market share only.

The same experts continue on noting how both BYD and Tesla – both now global EV-making powerhouses – will simply solidify their positions. Last month, they also reckoned Chinese automakers will capture no less than 33% of the global auto market, which roughly equates to 1 in 3 cars.

Additionally, the Alixpartners exports also reportedly highlighted the human costs behind all this, namely the staggering amount of overtime undertaken by Chinese workers in car plants operated by new EV brands. Some allegedly face as high as 140 hours monthly.

In contrast, the same worker in a factory churning out cars for legacy automakers only undertake a maximum of 20 additional work hours monthly.

Source: Automotive News Europe