Chinese Government officials have indicated that the country is set to consolidate its electric vehicle (EV) sector after the country delivered too many zero-emissions car makers.
Over the past decade China has heavily promote its domestic EV manufacturing sector and boosted incentives for car buyers as part of efforts to cut air pollution and avoid a repeat of January 2013, when the country spent 26 days shrouded by heavy smog.
But Bloomberg reported this week that the EV push has created so many OEMs producing zero-emission vehicles that some are barely viable.
At a press conference in Beijing yesterday (September 13) China’s minister for industry and information technology, Xiao Yaqing, said: “Looking forward, EV companies should grow bigger and stronger. We have too many EV firms on the market right now.
“The firms are mostly small and scattered. The role of the market should be fully utilized and we encourage merger and restructuring efforts in the EV sector to further increase market concentration.”
Bloomberg reported that China now has around 300 EV producers and said that government is now drafting measures to rein in overcapacity in the sector.
It said that Jiangsu province, north of Shanghai, is now home to around 30 OEMs, several of which are now bankrupt, while the average production capacity utilization rate for car makers in China was just 53% last year.
China’s EV market has grown quickly on the back of government subsidies, with the cost of the measures understood to total 33 billion yuan (around £3.7bn) during the five years to 2020.
Jato Dynamics’ recent ‘EVs – A pricing challenge 2021’ whitepaper suggested that Western car producing countries such as the UK and US should be looking towards China to set the agenda for their own acceleration of EV production.
It said that the country had succeeded in driving down the cost of an EV and many of its OEMs were now drawing back from a reliance on government incentives.
JATO Dynamics chief executive, David Krajicek, said: “The EV market continues to rapidly grow, especially as the environmental crisis climbs only higher on the agendas of governments, businesses, and consumers alike.
“As countries start to roll back their incentive programmes, manufacturers in the US and Europe should look to China’s lead and find avenues to reduce production costs, if they are to remain competitive in this space.”
Infrastructure concerns continue to hang over the widespread adoption of EVs in the UK, according to a report in The Times newspaper yesterday.
AM reported on the news that all new EV charge points will be soon be pre-programmed to switch off for nine hours each day as part of efforts to ease pressure on the National Grid and more motorists make the switch.