Analysts say dozens of Chinese EV makers may be forced to close or shrink operations in 2026 as industry growth slows and government incentives expire.

About 50 unprofitable EV makers face pressure to scale back or exit.

China’s car market is expected to see its first sales drop since 2020.

Deutsche Bank and JP Morgan forecast a 3% to 5% decline in total vehicle sales, citing overcapacity and reduced subsidies.

From January 2026, the purchase tax on EVs will rise from 0% to 5%.

Beijing has not confirmed whether the 20,000 yuan (US$,2854) trade-in subsidy will continue.

Analysts say only a small number of firms, such as BYD and Seres, are profitable, while many others risk running out of funds.

Industry experts expect more consolidation and a stronger push into overseas markets.

🔗 Source: South China Morning Post

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