Analysts warn that dozens of Chinese electric vehicle (EV) makers are approaching a do-or-die moment in 2026 as weakening domestic demand threatens the survival of unprofitable firms in the world’s largest car market.
Approximately 50 loss-making mainland EV companies are under pressure to scale down operations or exit the market, as China’s automotive sector is projected to report a sales decline next year—the first contraction since 2020—driven by industry overcapacity and softening government support.
“Time is against those players whose cars cannot impress young drivers,” said Qian Kang, owner of an automotive printed circuit board factory in Zhejiang province. “Performance next year will be crucial for most of the unprofitable EV assemblers.”
With cash subsidies and tax incentives set to expire, analysts forecast that domestic EV deliveries will likely slump further in 2026, even if manufacturers offer steep discounts to attract buyers. This period is expected to reshape the Chinese EV landscape, leaving only competitive and financially resilient companies standing.