China Plans To Merge Its Expanding Electric Vehicle Industry

China's government has expressed commitment to merge the country’s electric vehicles industry after a decade-long nurturing of the sector led to the emergence of too many players, some of which are narrowly operational.

Minister for industry and information technology, Xiao Yaqing said at a press conference in Beijing on Monday “Looking forward, EV companies should grow bigger and stronger. We have too many EV firms on the market right now,”

“The firms are mostly small and scattered,” he said. “The role of the market should be fully utilized and we encourage merger and restructuring efforts in the EV sector to further increase market concentration.”

China's government is drafting measures to rein in overcapacity in the sector and channel resources to a number of key production hubs, Bloomberg News reported last week, citing people familiar with the matter.

China's electric car industry is putting a new focus on consolidating the ranks of EV makers which has ballooned to about 300.

Regulators are considering setting a minimum production capacity utilization rate for the industry, and provinces that aren’t meeting it won’t be allowed to approve new projects until surplus capacity comes online, Bloomberg reported.

China's focus on moving the EV industry to a more sustainable footing comes as the country shakes up a raft of industries from tutoring to the property to big-tech in President Xi Jinping’s quest to remodel the nation’s economy and society.