The auto industry has been under pressure from all angles as a result of the global coronavirus lockdowns. And it looks as though while Elon Musk has been busy melting down, faux-libertarian style, about the re-opening of his California factory, things may have taken a turn for the worse for the EV market overseas.
In addition to the pandemic crippling demand, there seem to be far too many players in China's NEV market, and that has caused sales to come under pressure, according to Automotive News. China's market now has about 50 established EV startups competing with larger companies like Geely and Tesla.
In fact, new energy vehicle sales fell for a tenth straight month in April, plunging 43%.
Brian Gu, president of Alibaba-backed Xpeng Motors said: "The difficulties that EV start-ups have encountered, such as the auto sales decline, harsh fundraising environment and subsidies reduction, all started last year. The outbreak will aggravate these issues that already had existed."
He continued: "Only the top-tier EV makers will be able to attract attention from investors in this environment."
Experts believe the hit to the EV market could get even worse with the plunging price of oil, even despite subsidies and tax breaks.
One anonymous investor said: "Those who had not launched mass production of their car models by 2019 would probably die. The outbreak is going to accelerate their death."
The headwinds could make it difficult for China to reach its goal of having EVs account for 25% of all auto sales by 2025, according to the report. Currently, the number stands at about 5%.
We've previously noted that auto dealers in the U.S. are losing billions of dollars in fleet sales, which we documented just last week.
The lack of fleet sales, combined with a massive demand drop off, has led to a massive inventory glut for auto dealers, who are being forced to consider major incentives across the board to try and sell vehicles when the consumer makes their way back to the showroom.
The inventory glut has gotten so bad that we reported on ships of SUVs coming from Japan being turned away at California ports several weeks ago.