According to Alixpartners, there are currently 137 electric car brands operating in China, but analysts at the consulting company believe that only 19 of them will be profitable by 2030.
The high level of projected earnings contraction is due to the brutal price war that has been going on in China's domestic market for the past few years and shows no signs of abating.
Dominant firms like BYD have margins that allow them to repeatedly lower prices, squeezing out competitors whose margins are not as large but who are forced to lower their own prices to stay in the game.
The price war has already hurt some Chinese brands, including WM Motor, which declared bankruptcy in 2023, and Alixpartners expects many more companies to follow suit.
Analysts predict that brands that will not be able to make a profit will be forced to leave the industry altogether, or to change tactics and occupy only a small share of the automotive market, reports Bloomberg.
One startling detail contained in the latest analyst report concerns the number of overtime hours Chinese workers can take on at auto factories. They are said to be able to work up to 140 additional hours each month due to the rapid demand and queues for electric vehicles of certain brands.