Only those that can sustain their operations without resorting to external funding will stay in the country’s EV race as overcapacity woes loom, analysts said.
“As the domestic market becomes saturated and overseas sales in developed economies are hampered by punitive tariffs, the key players will have to be very efficient in cost control and refrain from splashy spending to save powder for the tough business environment ahead,” said Chen Jinzhu, CEO of Shanghai Mingliang Auto Service, an industry consultancy.
“The market has entered a new phase, with all companies expected to face a do-or-die moment soon.”
The mismatch between capacity and actual demand is stark. By the end of 2023, EV assemblers in mainland China were capable of producing 17 million electric cars annually, and the overall factory utilisation rate stood at 54 per cent, according to Goldman Sachs.
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