- China has the world’s biggest EV market.
- But Xpeng’s CEO, He Xiaopeng, says most Chinese carmakers will not exist in 10 years.
- He predicted that only seven major car companies would eventually be left in China.
Xpeng CEO He Xiaopeng doesn’t think most Chinese carmakers will survive the next decade.
“From 300 start-ups, only 100 of them survived. Today, there are fewer than 50 companies that still exist, and only 40 of them are actually selling cars every year,” He told Singaporean newspaper The Straits Times in an interview published on Monday.
“I personally think that there will only be seven major car companies that will exist in the coming 10 years,” the Xpeng founder-CEO added. He did not specify who he thought the seven survivors would be.
Representatives for He at Xpeng did not respond to a request for comment from Business Insider.
This isn’t the first time He has predicted brutal, self-eliminating competition among Chinese automakers.
In March, He told Singaporean broadcaster CNA that in the next three to four years, the Chinese EV industry will see a “knockout tournament,” followed by intense competition between “all-star” players.
Who prevails in 2030 will depend on the “abilities” and “feasibility” of these players, He said.
“The car industry is a marathon, it is not like a sprint,” He told CNA.
Mercedes-Benz CEO Ola Källenius took a similar position to He when asked about the threat posed by Chinese EV makers at the Berlin Global Dialogue conference in October.
“It’s strange. It’s a Darwinistic-like price war, market purification. And many of those players that are around now. Many of those are not going to be around five years from now,” Källenius said.
Chinese EV dominance
China’s EV dominance stems partly from the generous subsidies the country’s government has given car companies to lower costs and encourage EV ownership.
But the competition within China — the world’s biggest EV market —has become increasingly stiff.
Stephen Dyer, an auto consultant at AlixPartners, told The Wall Street Journal in April that in 2023, a total of 123 brands made sales of at least one EV on the Chinese mainland.
Chinese carmakers like BYD have also attempted to conquer the global electric vehicle market.
According to data compiled by the technology firm ABI Research for BI, Chinese carmakers accounted for 70% of the EV market in Thailand and 88% in Brazil in the first quarter of this year.
In its third-quarter earnings announcement last month, BYD said it surpassed Tesla’s revenues from EV sales for the first time.
Prices of Xpeng’s US-listed American depositary receipts are down nearly 11% year to date. The company has not recorded a profit since it was founded in 2014.
Xpeng’s vice-chairman and president, Brian Gu, said in March that the company is on track to “achieve profitability at some point in 2025.“
Xpeng is scheduled to announce its third-quarter earnings on Tuesday.
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