Consultancy firm Alixpartners predicts that only 19 out of 137 Chinese EV brands will achieve profits by the end of this decade. The rest may be forced to exit the industry, merge, or struggle to maintain a small foothold in the market.

According to Stephen Dyer, managing director at Alixpartners, “As long as major players like BYD maintain gross margins, there will be room for continued price wars.”

The persistent price wars over the past two years have put pressure on some Chinese EV manufacturers, a situation that will continue as major players like BYD and Tesla strive to strengthen their dominant positions.

Alixpartners further states that although the average car selling price in China decreased by 13.4 percent last year, the average car manufacturer margin increased by 7.8 percent in 2023 compared to 6.3 percent in the previous year.

By 2030, Chinese automotive manufacturers are predicted to hold a 33 percent market share in the global market and 45 percent in the new energy vehicle (NEV) segment.

However, the firm has lowered its forecasts for the European market from 15 percent to 12 percent due to additional tariffs imposed by the European Union on Chinese automotive manufacturers.