TV maker this time in China the world stop auto market is now going out of business 90 of

the manufacturers May face insolvency [Music] China is the biggest car market in the world
and the narrative is that they are on track to completely dominate the EV industry but in
reality it is far from the truth EV companies are going bankrupt daily with over 400
companies falling into liquidation already thousands of electric cars are abandoned in fields
across the country as the wheels literally fall off the Chinese EV industry join us as we take a
closer look at the largest ev Market in the world and reveal why ninety percent of Chinese
EV makers are going bankrupt China is one of the early adopters of the EV Trend and this
was evident in 2018 when the Wall Street Journal reported that there were as many as 487
EV makers operating in China at that time this remarkable figure can be attributed to the
clear message sent by the national government indicating its strong desire for China to lead
the world in electric vehicle technology also the local governments eagerly Embrace this
opportunity and have actively invested in these small companies in 2010 China's strategic
Vision identified new energy Vehicles nevs as one of the pivotal sectors that fall under what
they called the umbrella of strategic emerging Industries the Chinese government
recognized the potential of nevs which contained pure electric hybrid plug-in hybrid and Fuel
Cell electric vehicles Over time however the focus of support has gravitated towards fully
electric cars only to demonstrate its support the Chinese government implemented a range
of measures including generous subsidies tax breaks procurement contracts and other
policy incentives and because of this a host of homegrown EV Brands emerged and
diligently worked on refining new technologies to cater to the Practical needs of Chinese
consumers this effort also helped to provide a substantial cohort of young car buyers who
are increasingly drawn to electric vehicles the Chinese government has been taking steps to
invest in EV related Technologies since as far back as 2001 EV technology was quickly seen
as a priority science research project in China's Five-Year Plan which serves as the
country's highest level economic blueprint in 2007 the Ed industry received a significant
boost when Juan gang assumed the role of China's minister of Science and Technology
Juan an accomplished Automotive engineer who had spent a decade working for Audi in
Germany had already developed a strong affinity for EVS notably he personally tested
Tesla's inaugural EV model the Roadster in 2008 shortly after its release today many credit
won with the important decision to wholeheartedly Embrace electric vehicles at a national
level now while these 487 companies started out great only one of them is profitable today
and recent statistics reveal that only 40 of them are still operational today that means 447 of
them have gone bankrupt out of the 40 companies still operational only byd is currently
making money from EV sales that's not to say that the other won't make it we all know how
incredibly difficult it is to make money from EV sales presently Tesla and byd are the notable
exceptions the being the sole companies that have managed to achieve profitability from EV
sales however when comparing the operating profit margins of these Chinese companies to
Tesla there is a substantial Gap ranging from 14 to 74 percentage points despite byd's
remarkable sales growth the company continues to Grapple with modest profit margins
significantly lagging behind Tesla between 2019 and 2022 byd's gross profit margins for the
third quarter fluctuated at 16.3 percent 19.4 percent 13.0 percent and 15.9 percent
respectively while its net profit margins varied at 1.7 percent 3.8 percent 1.8 percent and 3.7
percent in contrast Tesla's gross profit margins for the same period stood at 16.6 percent
21.0 25.3 percent and 26.4 percent while its net profit margins were negative 3.15 five
percent two point seven percent ten point five percent and fifteen point three percent from
these numbers it is obvious that byd still has a long way to go in terms of cash flow the
difference between these Chinese companies in Tesla is substantial and is as much as 16 to
20 billion US Dollars many of these Chinese companies have faced substantial disruptions in
their Capital chains particularly this year several emerging car manufacturers operating in
the second third and fourth tiers such as highways leap motor weltmeister Sky well hoson
scitec and future Mobility have faced significant challenges in sustaining their operations and
navigating the competitive market landscape a critical Factor contributing to these difficulties
is the lack of capital after successfully establishing production bases and getting vehicle
manufacturing qualifications many of these companies find themselves constrained by
insufficient funds to help product development and expansion a lack of capital can hinder the
ability of a company to maintain High product quality standards and competitiveness in the
market and this will result in decreased sales and increase Financial losses highways
weltmeister and scitec among other companies have been faced with poor sales because of
issues surrounding product quality and competitiveness these problems have significantly
affected their financial performance leading to losses and putting their long-term
sustainability in Jeopardy scitec did manage to raise 500 million dollars in series a funding in
2021 but these Capital injections may not be enough especially because of how fiercely
competitive and capital intensive the electric vehicle industry is today also the transition from
manufacturing small electric vehicles to high-end electric vehicles can be another significant
challenge for small companies within the Chinese EV industry this transition often requires a
substantial capital investment to develop Advanced Technologies upscale production
capabilities and establish a brand presence in the high-end Market segment some of these
companies tried to do this but the sales performance of the newly introduced high-end
models fell short of expectations and it caused them massive Financial losses leap motor
and skywell auto as examples of companies that had this problem despite their plan to get a
larger market share by targeting the high-end segment the sales performance of their high-
end electric vehicles did not meet the expected levels another challenge faced by certain
companies within the Chinese EV industry is limited vehicle deliveries hoson Auto for
instance has experienced difficulties in delivering its vehicles to customers with only 900
units being successfully delivered so far in an EV Market where monthly delivery volumes
often reach tens of thousands such low delivery figures can undermine consumer confidence
in the company's ability to meet customer demand effectively this can lead to a diminished
Market presence reduced brand reputation and difficulties in attracting new customers
limited vehicle deliveries can be caused by various factors including production constraints
supply chain issues and logistical challenges inadequate production capacities bottlenecks
in the manufacturing process or insufficient distribution networks can all contribute to the
limited delivery capacity also traditional car manufacturers in China including Great Wall
Motors Gili Auto and GAC group have been witnessing significant growth in their new energy
vehicle sales this development not only reflects the shift in consumer preferences towards
electric vehicles but also adds further pressure to the emerging companies operating in the
Chinese EV market now despite the challenges faced by some Chinese EV automakers the
overall growth trajectory of the Chinese automotive industry is expected to remain robust in
the coming years several factors contribute to this positive outlook including strong domestic
demand technological advancements and an expanding global market share China's vast
domestic Market with a large population and increasing disposable income continue to drive
the demand for vehicles as consumers become more environmentally conscious and seek
sustainable Transportation options the demand for new energy Vehicles including electric
vehicles is expected to experience significant growth China's commitment to research and
development is expected to have a significant impact on the automotive industry including
electric vehicles and autonomous driving Technologies with a projected r d spending of 2.8
percent of its GDP by 2025 a substantial portion of this investment will likely be directed
toward advancements in the automotive sector this increased focus on R D will contribute to
the development of Cutting Edge Technologies further solidifying China's position as a
global leader in electric vehicles and autonomous driving in the Middle East Chinese
automakers are strategically positioning themselves to expand their presence and increase
their market share the Region's Automotive Market is projected to experience a compound
annual growth rate of 5.2 percent between 2021 and 2026 according to the latest
Automotive report this growth provides ample opportunities for Chinese car manufacturers to
enhance their sales and influence in the Middle East as the Middle East Embraces the
transition to electric vehicles and renewable energy Chinese automakers with expertise in
EV technology stand to benefit significantly with their experience in manufacturing electric
vehicles and advancements in Battery Technology Chinese automakers are well positioned
to cater to the evolving preferences of Middle Eastern consumers what do you think about
this news let us know down in the comments section