In China, there are or will soon be launched 500 startup companies that are targeting or already producing electric vehicles. The total capacity of the Chinese automotive industry for the production of electric vehicles is 20 million cars per year.
The Chinese government is already taking measures to restrict the entry of new companies into the production and development of electric vehicles. The information was published by The South China Morning Post, the publication predicting market saturation in 2020 when companies will be able to produce these 20 million electric vehicles. This seriously goes beyond the Chinese government’s goal of producing 2 million electric vehicles per year.
The restrictions imposed by the government are aimed at new and smaller companies – those whose production capacity does not exceed 100,000 cars per year. Generally, these companies will get a much harder production license.
These 500 new companies do not include the brands Byton, Nio or SF Motors, as joint ventures of Western companies with major Chinese companies such as BAIC, BYD, and others.
This news coincided with the information on the start of the construction of the Tesla plant in Shanghai, which will have a capacity of 500,000 cars per year. Shanghai also builds a VW electric vehicle factory with a capacity of 300,000 cars per year.
For 2018, new car sales in China fell by 5.8% to 22.3 million units. The biggest automotive market in the world has experienced a drop for the first time since 1990. At the same time, Bloomberg predicts that Chinese electric vehicle sales in 2019 will reach 1.5 million – this market will grow, but more modest than in previous years. The Chinese government’s target of 2 million per year does not remain much, but let’s not forget the production capacity of 20 million, which will be the case in 2020.
Even part of it to be realized, it will mean a collapse in the price of electric cars, which will lead to a series of bankruptcies for a large number of players on this market. And serious pressure, most likely supported by the state, to increase the export of electric vehicles.