Chinese EV factories run on 5.1% capacity only

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At the press conference of the State Council Information Office of China on September 13th, Xiao Yaqing, minister of the powerful Ministry of Industry and Information Technology (MIIT), said: “At present, China’s new energy automobile companies are too large and in a small but scattered state. Therefore, the next step is to give full play to the role of market competition and encourage corporate mergers and acquisitions to become bigger and stronger, to increase industry concentration further.”

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This triggered a series of discussions: If all production capacity is released, how many new energy vehicles can China produce in a year? According to statistics from the China Association of Automobile Manufacturers: As of the end of 2020, China’s total new energy vehicle production capacity was 26.69 million vehicles per year, but the cumulative sales of new energy vehicles in the same year were 1.367 million vehicles.

Based on this calculation, the capacity utilization rate of China’s new energy automobile industry is only 5.1%, and the idle capacity exceeds 25 million vehicles. By 2025, China’s new energy vehicle market will reach 5.3 million cars; while the production capacity will be 36.61 million vehicles, the capacity utilization rate will be only 14.47%, and the idle capacity will exceed 30 million vehicles.

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China’s new energy vehicle production capacity is currently in colossal waste; this is why Xiao Yaqing said that EV makers should concentrate resources as much as possible to avoid dispersion. In terms of the number of companies, China has 479 new energy vehicle manufacturers, according to Sina Auto. There were 48 new energy vehicle manufacturers registered in China in 2019 and 21 registered in 2020. Most of these 479 new energy vehicle companies are small and medium-sized companies, with large companies accounting for only 14.6% and small companies with a registered capital of fewer than 40 million yuan accounting for 41.3%.

On the whole, China’s new energy automobile industry is significant but not robust. Which companies will become the leading companies in China’s new energy automobile industry in the future? Relevant statistics show that in 2020, the sales volume of new energy vehicles in China was 1.367 million. BYD, Tesla, SGMW, SAIC, GAC, Great Wall, NIO, and Chery have sold more than 800,000 vehicles in total, and these eight auto companies account for more than two-thirds of the market share.

Source: MIIT, iFeng

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