Reference news network reported on October 19, according to the British "Financial Times" website reported on October 17, when the Shanghai electric vehicle startup Ai Chi was established in 2017, the future seemed to be bright. Led by former Volvo and state-owned auto executives, the company's investors include tech giant Tencent, ride-hailing group Didi and battery giant Ningde Times.

But six years later, it has failed to turn a profit, suspended production at a key factory and is struggling to pay staff and sell vehicles.

Dozens of Chinese auto groups have seen sales plunge, raising expectations of a wave of consolidation. That would leave only a handful of companies in the world's largest auto market.

While some Chinese carmakers, such as BYD, are becoming household names, hundreds that emerged during the investment boom of the past decade now face an uncertain future.

According to information compiled by McClair Information Consulting, there are about 50 domestic electric vehicle brands in China producing pure electric vehicles and plug-in hybrid electric vehicles. But Paul Gong, an analyst at UBS, said that by 2030, "China will have 10 to 12 automakers with large-scale operations."

Since Tesla sparked a price war in China late last year, the pace of industry consolidation has accelerated. Weimar Motors, another electric car company based in Shanghai, told creditors last week that it had started a pre-restructuring process in early October. Weimar was founded by the former chairman of Volvo China.

A number of other companies, such as Singularity Motors and Reading Motors, have also entered bankruptcy proceedings in recent months, while electric vehicle start-up Skyrim suspended production in April. "Price cuts are the new normal in China's auto market, and this trend will continue until many small car companies are eliminated," said Zhang Xiang, a visiting professor at Yellow River University of Science and Technology.

Exports are widely seen as one of the solutions to the overcapacity problem in China's electric vehicle industry. But the US Inflation Reduction Act, aimed at reducing China's dominance in key sectors, and the EU's recent anti-subsidy investigation into Chinese electric vehicles have added to uncertainty about the viability of the strategy.

The Chinese government has also tightened the issuance of production licenses for electric vehicles to address growing overcapacity.

Photo taken on July 17, 2019 shows the SUV Atto 3 electric vehicle at a BYD sales point in Tel Aviv, Israel (Photo by Chen Junqing).

Source: Overseas network