- There are well over a hundred car manufacturers in China, but only 10% could survive into the next decade, a new report claims.
- Some will merge with larger companies, while others will simply disappear if they can't reach profitability soon.
- There has been a steady stream of Chinese carmakers going bust, the most recent being Neta in June.
China has the world’s biggest car market, especially when it comes to plug-in vehicles. The market has been growing exponentially over the last decade, and it has seen an explosion in the number of car brands competing for buyers’ shortlists. However, the market now appears to have reached a more mature stage, where growth is tapering off and smaller brands are starting to disappear.
A few months ago, we looked into this and discovered that several seemingly promising plug-in car startups had gone out of business. These were brands that had their own stand at the 2024 Beijing Auto Show and, at the time, didn’t seem like they were about to go bust. But many companies have already gone away, and more are sure to follow, according to a new report from AlixPartners.
Some will simply go bankrupt and fade into history, while others will be acquired by larger players, much like everywhere else in the world. In the United States, for instance, there were 253 car manufacturers in 1908, and the number dropped sharply to just 44 names by 1929. This culling of car brands was attributed to the Great Depression of the 1920s, but it continued even after the economy recovered and through the post-World War II boom.
Eventually, it all consolidated into what became known as the Big Three (General Motors, Chrysler and Ford), all of which had many brands under their umbrellas. Something similar will inevitably happen in China, and the study by global consulting firm AlixPartners says that out of today’s 129 plug-in car manufacturers, only around 15 will remain afloat by 2030.
Each of the big brands will have average annual sales of around 1 million units, the report claims. What the report doesn’t directly state is the inevitability of this trend persisting and the number of carmakers continuing to fall. It didn't say which brands it thinks will survive, but I would assume that they include the biggest names like BYD, Geely, Changan and Chery.
The competition between carmakers in China is fierce, and it has even led to a price war, which, over time, will weed out all but the most competitive players as the market continues to consolidate. Even though Chinese regulators have asked automakers to stop trying to out-price one another, this practice will likely continue, even if not through direct price cuts but through other forms, such as finance or insurance deals.
Last year, Xpeng company boss He Xiaopeng said that he believed “most” Chinese car brands would be gone in 10 years. He predicted that only seven very large carmakers would remain, according to statements he gave to Business Insider. An automotive engineering university professor, Zhu Xican, said in a Tencent News panel quoted by CarNewsChina that there’s no chance for startups like Xpeng, Nio or Li Auto to survive on their own and that they will have to merge or disappear.
Zhu went on to say that any carmaker that sells fewer than 2 million units annually won’t survive, as it wouldn’t be able to support ongoing R&D costs, and its products would become technically and technologically inferior to the competition.
To stay afloat, Chinese automakers will also need to look abroad and strengthen their presence in other major Asian and European markets. The AlixPartners report suggests that Chinese automakers could double their market share in Europe and reach 10% by 2030. If you go to pretty much any European country, you may be surprised by how many Chinese plug-ins are already on the road, and more and more automakers are looking to set up shop on the continent and even produce cars there to bypass import tariffs.
Chinese car brands are doing great at home, where their market share has risen to 67% in 2025, and there doesn’t seem to be an end to this upward trend. Buyers are increasingly turning to local brands over foreign names, even if those cars are locally manufactured with changes specifically designed to attract Chinese buyers. But with such fierce competition, even in a growing market it may be hard for most companies to survive.
