That was what Industry and Information Technology Minister, Xiao Yaqing highlighted recently and is encouraging these companies to consolidate.
Currently, the biggest electric car players in China include Nio and Xpeng, and last year the country saw electric vehicle sales exceeding 1.3 million units. This is mainly due to subsidies for consumers to make electric cars more accessible.
To put things in perspective on just how big the Chinese electric car market is; Malaysia only sold about half a million cars in pre-pandemic 2019. You may argue that this is partly down to population but their focus on electric vehicles is unlike any other country.
This makes China the largest electric car market in the world but they’re only just beginning. The government recently announced that by 2030, 40% of its cars will be electric.
Xiao Yaqing said while the direction of the local electric car market is encouraging and prospering, there are too many small players scattered across the country. According to an article by Fortune, there are about 300 electric car makers in China.
As such Xiao is encouraging the bigger players to weed out the smaller ones. This approach, according to Xiao’s statement, would further intensify and accelerate EV growth and adoption.
Bloomberg also reported that the Chinese government is already working on new policies to encourage consolidation.