China, today, is one of the countries that lead the transition to electric vehicles that little by little is gaining presence in all markets. Especially with him goodbye that will be given to the new combustion cars from 2035.
But sometimes being the leader in a market can have certain drawbacks. And in this case it may be the overproduction of electric vehicles. Now, the Chinese government wants to promote the consolidation of brands because, they say, China has “too many” manufacturers of electric cars, as announced by the Minister of Industry and Technology, Xiao Yaqing.
About 300 car manufacturers in the market
The electric vehicle market in China is almost the largest, so the federal government has begun to work out measures to curb excess capacity. The idea that the different manufacturers organize the market through tax exemptions and different incentives to consolidate the factories.
It is intended to set a minimum price for the use of technology in order to manufacture of vehicles, among other measures, which have not been detailed, to face the situation in which the country finds itself. For starters, they have already fined three chip and processor companies for inflating their sales prices.
The main problem that the Asian giant has is that, today, it has around 300 car manufacturers according to Bloomberg data. Just in Jiangsu province, north of Shanghai, for example, it is now home to around 30 automakers, some of them bankrupt.
The Chinese market has already exceeded 22 million cars per year and the one million vehicle barrier. And that is why in 2019 they already began to take action.
That year, the Asian giant began to limit access to more automakers due to the large number of them that were already on the market and, above all, to small emerging companies. But it should not have been enough and for that reason they propose to regain control over the industry.