China EV market is headed toward a consolidation
The electric vehicle sector has been witnessing the most exciting moment right now and one should not avoid the potential of consolidation in the EV sector
The electric vehicle sector has been witnessing the most exciting moment right now and one should not avoid the potential of consolidation in the EV sector. Some of the analysts are stating that consolidation is becoming inevitable in the industry. One analyst has cited some potential reasons like the EV sector’s tech-heavy and capital intensive nature. They stated that companies have witnessed an invisible hand historically and also the regulations, and trends, navigated through the industry to exacerbate the consolidation trend in the country.
Huaibin Lin, an analyst at IHS Markit, believes Beijing would not intervene in the immediate term. He told on Tuesday that calls from the industry and information technology ministry for auto sector consolidation are not new and have been ongoing for the past 20 years. “We are in an ever-increasing industry where we have seen enormous increase in vehicle... sales for the past 20 years,” said Lin, IHS Markit's China automotive manager. He went on to say that the market for new energy vehicles is now gaining a lot of traction.
According to business database Qichacha, China's electric car market is seeing fast development, with tens of thousands of firms getting on board and shares of Chinese electric car producers such as Nio and Xpeng surging. Additionally, China and the Chinese government has stated that by 2025, the country is looking forward to establish a 20% of new automobiles to be sold has to be an EV. Nonetheless, the two analysts believe it is too early to predict who would emerge as the obvious winner in China's electric vehicle market. “I feel it is a little too early to predict which brand or name would triumph in the end,” Liu of Bain said.