Almost every week there seems to be a new small Chinese manufacturer of electric cars emerging. This is also seen in China and the government wants something to change. Larger companies have more clout, is the idea.
According to the local government, China has too many companies involved in the development of electric vehicles. Nurturing the sector for years and spawning it with subsidies, for example, has led to a proliferation of companies involved in electric driving. Some of those businesses are barely viable. Beijing therefore wants a consolidation in the market so that these manufacturers become bigger and stronger. In recent years, large amounts have been paid out by Beijing in subsidies to encourage consumers to buy a clean car.
“We have too many EV companies in the market right now,” said Xiao Yaqing, the Minister of Industry and Information Technology. “The companies tend to be small and dispersed. The role of the market must be fully exploited and we encourage merger and restructuring efforts in the EV sector to further increase market concentration.”
The Chinese electric car industry is the largest in the world with more than three hundred companies. Beijing is now said to be preparing measures to limit overcapacity in the sector, leaving only a few key manufacturing centers.