Chinese EV Makers Are Going BANKRUPT in HUGE Numbers!
The Chinese government has been bumping billions into its EV industry in the last decade or so with the obvious goal of becoming an absolute leader in the new automotive industry today things seem way more complicated while there are some companies that manage to stand out most of them are struggling Chinese
EV makers are going bankrupt in huge numbers and we’re now wondering how this will affect the Chinese as well as the global EV industry wave of bankruptcy the moment the Chinese government decided to go on Full Throttle with electric cars things became crazy at first the number of
Registered startup companies went up to 500 backed by the government subsidies we all knew that couldn’t last for long so just a couple of years later the number went down significantly from roughly 500 registered EV companies in 2019 the number went down to around 90 but even that number of registered car
Makers is too big even for a market like China and with the situation becoming more and more challenging in the last few years it doesn’t surprise that we’re currently witnessing a wave of bankruptcy only in the last few months four EV companies along with hundreds of dealers
Have gone bankrupt among them one of the first that comes to mind is Neutron a company that decided to refund all customers and C’s exit the same thing happened with lein a promising company that was actually ahead of Tesla in terms of sales numbers during 2015 and 2016 selling hundreds of thousands of
EVS annually but probably the most shocking was the most recent bankruptcy of the ever Grande new energy Auto an EV division of one of the largest conglomerates in the world at a company that has invested billions over the last several years now it turns out that the
Company has lost $17 million on every vehicle sold we’ll get on that in a moment but let’s take a quick look at one more recent case first WM case WM is one of the companies that recently filed for bankruptcy what’s particularly intricate in this case is that this
Company was considered one of the most promising Eevee makers in China it was backed by several major Chinese companies such as BYU and tenson so it’s legal to say it was one of the wealthiest startups around along with Neo according to Chinese sources the total amount of money funded was over
$5.3 billion but even with such a jump start the company didn’t manage to establish its position on China’s super competitive EV Market simply the pressure on Chinese EV makers to make the latest tech but also make sure that these products are super affordable is huge along with financial struggles
There was the covid-19 pandemic which brought an even fiercer price War WM had a hard time adapting to this price war and it wasn’t capable of covering significant losses totaling 1.2 billion some companies such as kishan Auto Holdings announced plans to acquire WM but after the recent bankruptcy filing
That deal remains unclear WM motor on the other hand announced a plan to undergo a massive restructuring process and find new investors to reinvent itself as official stated even big ones struggle as we’ve just mentioned the Chinese EV Market is extremely challenging due to the imposed price War logically smaller companies suffer the
Most but what’s interesting is that even big ones are struggling even these companies need new Investments to remain in the game simply said capital is a problem for everyone let’s take Neo as an example this is one of the leading EV companies in China with more than 11,000
Employees but sales are nowhere near as the company was expecting the second quarter of the last year was particularly problematic as the company managed to sell only 8,000 units we’re talking about a large scale manufacturer a company that invested millions in Rob spots at its factories and a company
That offers some of the most advanced EVS in China with Advanced self-driving systems augmented reality glasses and similar things sales numbers are still low to compensate for this production optimization and as a result Neo reported losses of $35,000 per EV sold in that quarter and with these sales tumbling at such a
Large scale some of the moves were quite easy to predict starting from the capital infusion from Abu Dhabi for a 7% stake in return as well as a massive Financial injection from the local government of Hai meanwhile the founder and CEO William Lee was attacked by fans
At a customer Gala dinner it’s too competitive to make a profit we already mentioned that the competition in the Chinese market is extremely Fierce and even the big players are often unable to form a competitive price without losing money on every EV they sell Lee Auto is
A perfect example this company is known as a manufacturer that produces high-end high-tech electric Crossovers and now the threat is coming from a new startup Ido this company released a new model the M7 which has pretty much the same features as Le Auto’s S7 but can be bought for significantly less money in
Such a set of circumstances where new startups are cutting prices to establish their position on the market it’s obvious that every company is losing money and while that may seem like a shortcut to success the fact is that startups are anything but safe aside from those state-owned these companies
Are delivering relatively small numbers of vehicles which clearly indicates their plans are not sustainable many of them could die out soon companies like ever granded new energy Auto Airways and neutron already closed their factories while the state-owned faw group filed for bankruptcy last year practically only those startups that are backed by
Major companies have a chance to survive one of them is Zer a brand established by one of the major companies G that startup has the potential to push into the international market which is probably the only way to survive the domestic price War it has a two- Direction strategy with luxury EVS for
Asia and Europe on one and Robo taxis in North America on the other finally a few words about the ever Grande new energy Vehicle Group as promised it’s pretty legal to call this company a champion of falling because not so long ago this was one of the highest valued car companies
In the world with a market value higher than Ford Motor Company many experts were predicting a bright future for one of Tesla’s biggest Global Rivals a few years later the company ended its Journey with a sales record of 1,300 electric vehicles and a massive loss of nearly $24 billion which leads to the
Conclusion that this company managed to lose 17 million on every vehicle it ever sold enough to shut its doors definitely no room for small players these are definitely very turbulent times for the Chinese automotive industry but what does it mean on the global scale most likely China will remain a leader in the
EV industry but the landscape of the industry will change drastically we already mentioned that the total number of EV companies went down from 500 in 2019 to around 90 today but that’s only the beginning many more EV companies will close their doors due to the aformentioned pressure that comes from
The price War and the constant need for further technological Advance it’s the natural order where big fish eat small fish that’s currently happening to China as most of the market share is held by a few companies more precisely around 80% of total EV sales from the last year
Belong to the top 10 EV companies and the current Trend suggests that these companies will get even bigger as you may presume the leading position belongs to byd a company who sales numbers measure in millions on the other hand out of these 90 EV makers at least 1/3
Sell no more than 2,000 EVS annually experts suggest that at least 20 more companies are going to file bankruptcy in the near future eventually most of them will close their doors or be acquired by bigger players as for the companies that’ll most likely survive these turbulent times the aformentioned
Byd and Tesla are probably the only two companies that have the capacity for a long-term price War their production costs are low and they’re probably the only ones that can sacrif profitability for volume then there are companies that may not have such impressive sales records in China but have a strong
Presence in international markets we’re talking about companies like gie which definitely have the capacity to survive all these troubles on the domestic Market China may be leading the world with it comes to EV technology but it’s domestic Market isn’t developed enough for such a sheer number of companies
Modest consumer spending kills the local companies so even those who are seen as more likely to succeed end up stranded covid-19 pandemics Capital markets downturn and cost of raw materials along with a shortage of funds are the combination that leads to a complete change in the Chinese EV industry
Landscape soon enough the industry will come down to a couple of major manufacturers Just like how it’s the case in most other parts of the world meanwhile we’ll be seeing a lot of suffering thanks for watching and see you next time
Chinese EV Makers Are Going BANKRUPT in HUGE Numbers! The electric vehicle (EVs) market in China is facing a massive crisis. Many of Chinese EV makers are going bankrupt, leaving behind huge debts, unfinished projects, and angry customers. What is causing this EV collapse, and who is to blame? In this video, we will expose the dark side of the Chinese EV industry, and how it affects the global EV market. You will be shocked by the scale and the consequences of this EV disaster. Don’t miss this revealing and alarming video about Chinese EV makers going bankrupt in huge numbers!
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