Dozens of Chinese EV makers under pressure to fold or trim operations in 2026: Analysts

China's overall vehicle output, including buses and lorries as well as passenger cars, may hit 33 million units in 2025, compared with an estimated capacity of around 50 million units, Nick Lai, head of auto research in Asia-Pacific at JPMorgan, said in October.

The average net per-vehicle ­margin – the gap between the ­selling price and production costs such as raw materials, labour and logistics – stood at about 5,000 yuan among Chinese carmakers, according to Lai.

He added that this margin could rise four-fold to 20,000 yuan if carmakers were to export more vehicles to overseas markets, where their products could command higher prices.

Stephen Dyer, Greater China co-leader and head of Asia automotive practice at AlixPartners, said in July that only 15 Chinese EV brands, or 10 per cent of the country's total, would turn a profit over the next five years, as price competition continued to squeeze profit margins.

The price war could accelerate the pace of consolidation in China's EV sector, as carmakers that sell fewer than 1,000 units a month are expected to exit the market soon, according to Dyer.

China EV100, a non-governmental organisation composed mostly of EV sector executives, said in a report earlier this month that five to six Sino-foreign joint venture carmakers, whose annual deliveries are fewer than 100,000 units, would face liquidation over the coming few years.

International marques like Ford Motor, Mazda Motor and Lincoln run China-based ventures whose annual deliveries fall short of the 100,000 unit mark, according to official car insurance registration numbers.

"We expect China passenger vehicle overseas sales volume to continue to enjoy double-digit growth in 2026, or up by 13 per cent year on year, which would boost wholesale sales by 750,000 units due to increasing localised production, expanding product portfolio and entry into new markets," the Deutsche Bank report said.

< p>The increased volume would represent 3 per cent of the projected full-year deliveries in 2026, it added.

This article was first published on SCMP.