China believes there are too many local EV makers.And why it matters

Since China is the world’s largest automobile market, it is also the world’s largest electric vehicle market. In addition to the Chinese government’s promotion of electric vehicles, this has led hundreds of local EV makers to compete with each other and with foreign brands for a share of profitable pies.

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However, having a lot of local players can be a problem.

According to reports, the country’s Minister of Industry and Information Technology, Xiao Yaqing, has expressed concern that local EV players are far away. “Most of the companies are small and scattered. We need to take full advantage of the market role and encourage mergers and restructuring efforts in the EV sector to further increase market concentration,” he said. rice field.

One of the main problems with too many EV manufacturers across the vast Chinese landscape is that resources may not be properly allocated if there are large hubs or centers. This can be especially important in today’s semiconductor shortage era.

Second, due to production scale issues, some smaller players are unable to deploy enough units to meet demand and cannot consider subsidies. And some even went bankrupt in the process.

As such, experts believe that the way small players in the EV sector move forward is to work together to undertake large players such as Tesla, Volkswagen, Toyota and foreign brands together. .. China believes there are too many local EV makers.And why it matters

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