China’s electric vehicle (EV) market, the world’s largest, faces a dramatic shakeout, with only 15 of the current 129 EV and plug-in hybrid brands expected to remain financially viable by 2030, reports Reuters. Intense competition, overcapacity, and a brutal price war are forcing consolidation, reshaping the industry’s future, according to a new report from AlixPartners.

Consolidation Looms Amid Fierce Competition

AlixPartners projects that the surviving 15 brands will dominate, capturing roughly 75% of China’s EV and plug-in hybrid market by 2030, each averaging annual sales of 1.02 million units. The consultancy did not name specific brands, but the data underscores a stark reality: most of today’s players will either merge or exit.

Stephen Dyer, head of AlixPartners’ automotive practice in Asia, noted that consolidation may unfold more slowly than in other markets.

“Local governments may continue supporting non-viable brands due to their importance to regional economies, employment, and supply chains,” Dyer said, highlighting the role of regional politics in delaying market corrections.

Price Wars and Overcapacity Strain Profitability

China’s EV sector is grappling with a price war that has slashed margins. Except for BYD and Li Auto, no publicly listed Chinese EV maker has achieved full-year profitability. Dyer estimated that the price war will persist, shifting from direct discounts to subtler tactics like insurance subsidies and zero-interest financing.

“The war would likely continue, but through ‘hidden’ factors,” he said, signaling ongoing pressure on manufacturers.

Compounding the issue, China’s auto plants operated at just 50% capacity utilization in 2024, the lowest in a decade, according to Dyer. This overcapacity—equivalent to millions of unsold vehicles—further erodes profits, as factories sit idle or produce at a loss. For context, a typical plant might produce 200,000 vehicles annually, meaning half of China’s production lines are underused, costing billions in lost revenue.

Implications for EV Makers and Consumers

The consolidation will reshape the competitive landscape. Surviving brands will likely invest heavily in technology, such as advanced battery systems and autonomous driving, to differentiate themselves. For consumers, this could mean higher-quality EVs with better range—potentially exceeding 400 miles per charge—and more competitive features, though prices may stabilize as discounts wane. However, the exit of smaller brands could reduce variety, limiting options for niche buyers.

Regulatory pressure is another factor. Chinese authorities have urged automakers to end price wars, aiming to stabilize the market. Yet, with hidden subsidies likely to continue, consumers may still benefit from indirect savings, such as $1,000 in insurance rebates or $500 in financing perks, based on current trends. For manufacturers, navigating these regulations while maintaining competitiveness will be critical.

Global Ripple Effects

China’s EV market, which sold over 9 million vehicles in 2024, sets global trends. A leaner industry could strengthen surviving brands’ ability to export, challenging Western automakers. For instance, BYD’s expansion into Europe, where it sold 100,000 vehicles last year, shows how Chinese firms leverage scale. However, overcapacity may also lead to dumping allegations, risking trade tensions.

The road to 2030 will be turbulent, but the survivors will emerge stronger, driving innovation and redefining the global EV landscape. For now, the industry’s focus is clear: adapt or disappear.