In five years, only 10% of Chinese automobile companies will be in good financial health.

Last week, consulting firm AlixPartners released the "2025 Global Automotive Outlook" report. The report points out that currently, there are a total of 129 new energy vehicle brands on sale in China (including pure electric and plug - in hybrid vehicles). However, by 2030, at most 15 brands will be able to achieve financial sustainable operations.

Pessimistically, there may only be 10 left.

This means that only one - tenth of the automakers are financially healthy. Fierce competition will force most brands to integrate or exit the market. The report does not specifically mention the names of relevant brands, but AlixPartners predicts that after five years, these 10 - 15 brands will account for 76% of the new energy vehicle market in China, approximately 20 million vehicles. The average annual sales of each brand may reach 1.02 million vehicles.

Survival of the Fittest Becomes the Main Theme

Stephen Dyer, the head of the automotive business in the Asia region at AlixPartners, said that the integration of new energy vehicle brands in China is expected to be slower than in other countries and regions. This is because local governments often support those less - profitable automotive brands considering comprehensive factors such as regional economy, employment, and supply - chain matching.

"China is one of the most competitive new energy vehicle markets in the world. There is a fierce price war, strong innovation ability, and new participants are constantly emerging, which together raise the industry standards. Such an environment has promoted significant progress in technology and cost - efficiency, but it also makes it difficult for many companies to achieve sustainable profitability."

As of now, except for a very few brands such as BYD and Li Auto, most listed new energy vehicle manufacturers have not achieved full - year profitability. Stephen Dyer said that the average capacity utilization rate of Chinese automakers dropped to 50% in 2024, the lowest level in a decade, which has added many difficulties to corporate profitability.

"Although Chinese regulators have called for an end to the price war, the invisible price war may continue. For example, through insurance subsidies and zero - interest loans instead of direct price cuts." Stephen Dyer believes that China is currently facing the dual pressures of a price war and severe over - capacity, both of which will impact corporate profits.

On the other hand, the strong are setting the standards. AlixPartners' latest report states that Chinese new energy vehicle manufacturers have innovated in operating and manufacturing models, setting new standards for the R & D speed, production efficiency, and technological iteration of global automobiles.

In China, the development cycle of new car products has been shortened from five years to about eight months, and manufacturers can bring new cars to the market at a faster pace. Compared with the global average, the vehicle verification cost of Chinese automakers can be reduced by 20%, and the overall cost can be reduced by 30%. These advantages will help launch high - quality products at low prices and enhance market competitiveness.

Accelerated Reshaping of the Global Landscape

The report points out that by 2030, the surviving Chinese brands will capture overseas markets more quickly. Through strategies such as local production, their share in the European market will double to 10%, and the capacity utilization rate of European local automobiles will continue to decline.

In 2030, Chinese automakers are expected to add 800,000 - vehicle - level production capacity in Europe, while European local automakers will shut down 400,000 - vehicle production capacity, equivalent to 1.5 large - scale factories. In order to optimize resource allocation, European automakers will gradually dispose of original assets worth up to $18 billion, and strategic contraction will become the main theme.

The growth rate of new - car sales in the Chinese domestic market will slow down to about 3%. In order to find business growth, more leading automakers and suppliers will accelerate their expansion overseas. The stable growth of Chinese automakers going global will mainly rely on three pillars: first, a cost about 35% lower than international competitors; second, the local production strategy; third, intelligent technological configurations that accurately capture the preferences of young consumers.

China's export expansion will promote the reshaping of the global automotive landscape. A bipolar pattern between China and the United States may form around 2030. Andrew Bergbaum, the global head of AlixPartners' automotive and industrial team, pointed out that European automotive assets are becoming the focus of global mergers and acquisitions. At such a turning point of transformation, global automakers should accelerate innovation and consider taking non - traditional strategic actions.

The "Global Automotive Outlook" report is an annual important research report of AlixPartners' automotive and industrial manufacturing team, which is released every year. This year, it specifically mentions the impact of Trump's new tariff policy and geopolitics on the automotive industry.

The report points out that due to the uncertainty of US tariffs, the pace of Chinese automakers going global will temporarily slow down. In addition, the additional cost brought by the US tariff war will reach about $30 billion in 2026, which will prompt more US automotive supply chains to move out of China to reduce the impact of tariffs.

With the rise of Chinese brands, the continuous price war, and more overseas brands choosing to move out of China or implement strategic contraction in China, the market share of joint - venture enterprises is gradually shrinking in China. AlixPartners predicts that Chinese automotive brands will account for 67% of the domestic market in 2025, setting a new record again.

It is worth mentioning that Chinese automotive brands are not only gradually catching up in sales but also gradually taking the lead in cutting - edge technologies such as intelligence and electrification. Taking assisted driving as an example, the report points out that the global ADAS market size will reach $50 billion in 2030, and China's share will soar to 45%, showing great potential in the next few years.

Since the previous two years, AlixPartners' automotive reports have sent out the same message -

The core competitiveness of Chinese automobiles should not be underestimated. Chinese automakers initiated the efficiency revolution first. They have a fast R & D speed, the advantage of a complete industrial chain from raw materials to vehicle assembly, and guaranteed shipping capacity. The rise of Chinese automakers has completely changed the rules of the game. Those European and American manufacturers accustomed to traditional business models and manufacturing logics will eventually be eliminated from the industry if they stick to the old ways.

This article is from the WeChat public account "C Dimension". Author: Jackfruit, Editor - in - Chief: North Shore, Editor: Wang Yue. It is published by 36Kr with authorization.