China: Too Many Small Players in the Electric Vehicle Market

China has too many companies involved in the development of electric vehicles. Beijing, therefore, wants to see a consolidation in the market so that these so-called EV companies become bigger and stronger.


For years, nurturing the sector and spawning it with subsidies, for example, has led to a proliferation of companies involved in electric driving. Some of those businesses are barely viable. In recent years, large sums have been paid out by Beijing in subsidies to encourage consumers to buy a clean car.

“We have too many EV companies in the market right now,” said Xiao Yaqing, the Minister of Industry and Information Technology. “The companies are usually small and scattered. Therefore, the role of the market must be fully exploited, and we encourage merger and restructuring efforts in the EV sector to further increase market concentration.”

The Chinese electric car industry is the largest in the world, with more than 300 companies. However, Beijing is now said to be preparing measures to limit overcapacity in the sector, leaving only a few key manufacturing centres.

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