Chinese car manufacturers need to expand their market share globally if they don’t want to be phased out of the market.
The competition in the electric vehicle development is predicted to become even more fierce in the near future, and to avoid being phased out, Chinese car manufacturers cannot solely rely on selling cars in the domestic market. In an interview with the Financial Times, Brian Gu – Vice Chairman of the electric car company Xpeng, stated that Chinese brands need to sell about 3 million cars per year to survive in the next decade. He said that this is not an easy goal to achieve, as even Tesla only reached 1.3 million car sales in 2022.
Brian Gu also believes that the competition for market share in the electric car industry will lead to many car companies being acquired or bankrupt, resulting in a much smaller market in the near future. “In 5 to 10 years, the world will become a much more concentrated market. I think the number of global car brands may decrease to below 10,” said the Xpeng executive.
This somewhat pessimistic prediction is made during a difficult time for Xpeng and the Chinese car industry in general. Xpeng is currently the 12th largest electric car manufacturer in China, and the rapid growth of the brand is largely due to the support from the technology conglomerate Alibaba. Xpeng sold more than 120,000 cars in 2022, and then saw a nearly 50% decrease in sales in the first quarter of this year due to Tesla’s significant price reductions on many models.
Currently, China is the largest electric car market in the world, accounting for 50% of the global sales of electric vehicles last year. This second most populous country in the world currently has 99 different car brands, with a variety of models in terms of design, price, and quality. The flexibility of the market allows consumers to easily find a cheap electric car with a starting price from $5,000 to more expensive models priced at $90,000 and above.
81% of the Chinese electric car market is currently dominated by domestic companies, including top companies such as BYD, Wuling, Chery, Changan, and GAC. The remaining 19% is filled by foreign companies such as Tesla and Volkswagen.
Thái Sơn (Tuoitrethudo)
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