The Chinese government is encouraging consolidation in the country’s new energy vehicle (NEV) industry, saying there are too many small-scale manufacturers operating in the country, according to local reports.
The ministry of industry and information technology, the main industry regulator, said on Monday it wants to see fewer but larger and more competitive domestic manufacturers operating in the NEV segment.
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By GlobalDataIndustry minister Xiao Yaqing said in a statement: “Currently there are too many NEV makers with small status. I would like to see a series of mergers and acquisitions to enable companies to become larger and stronger.”
Xiao added: “The sector is very technology-heavy and resources should be market-oriented as much as possible to avoid dispersion. We need to work hard to promote healthy and high-quality development of this sector.”
China is the world’s largest single market for NEVs, mostly electric vehicles (EVs), with sales tripling to 1.799m units in the first eight months of 2021.
While a number of strong domestic EV manufacturers have emerged in China in recently years, including Geely, BYD and SAIC Motor, the government is concerned the benefits of a strong domestic market may be diluted by the presence of a large number of small regional manufacturers.
