Chinese electric cars everywhere, is this a blessing or curse?

By David McMullan

China’s EV industry starts to resemble its motorcycle and auto trades in terms of market overkill.

China's electric-vehicle manufacturing marketplace is so congested it's beginning to look like the dot-com bubble that burst in the early 2000’s; the industry's top manufacturer cautioned sounding the latest alarm for an marketplace loaded with around 500 players (and maybe more)!

Many similarities exist between China's EV trade today and the crash twenty years previously when all types of random businesses tried to become internet success stories, Lian Qingfeng, VC at Beijing Electric Vehicle, said at the firm's Beijing H.Q. As many as 80% of the present start-ups could vanish, with a big reorganisation upcoming inside a couple of years.

For a long time, substantial government policies and plentiful funding turned China into a hub for industrialists looking to become the next Elon Musk, changing the country into the world's biggest market for battery-powered vehicles by a long distance.

Alas, as the government starts to pull back on assistance and traditional automakers get serious about producing electric cars, pressure is building on several of these start-ups to come up with justifiable business strategies.

Mr Lian stated "Some of the automakers may be eradicated intensively by 2021 due to the lack of core strength such as capital shortages or the failure to pass ‘live or die' tests,". He continued "Speculators will be squeezed out during the process, while the pressure to survive will help competitive companies emerge as the true leaders."

China Consulting Solutions has many contacts in the Electric Vehicle industry in China. If you need market reports and new research and development data on any aspect of the EV industry contact us for a free initial consultation