Just a handful of Chinese electric-vehicle battery makers may survive the end of Beijing’s large-scale subsidy program next year, which has been instrumental in nurturing the world’s largest domestic market, according to the Nikkei Asian Review.
Industry leaders Contemporary Amperex Technology (CATL) and BYD will be among the few battery manufacturers remaining once the subsidies are withdrawn, though even these large firms will take a hit as their technology mostly still lags behind rivals in Japan and Korea.
“Policies [on electric vehicles] have shifted recently to eliminate companies without technological prowess,” said a BYD manager. “We need to boost our competitiveness further before the subsidy programme ends.”
China has invested over $10 billion in the EV battery industry since 2012, but the government’s generous subsidies, which reached up to Rmb 10,000 per car sold, will be gradually phased out by 2020.
Despite fostering an enormous market with hundreds of manufacturers, Beijing’s changing policies towards new energy vehicles have often led to market distortions, such as massive oversupply, and the need for painful corrections.