Electric vehicle (EV) industry in China could be the face of the next regulatory crackdown by Chinese authorities. Xiao Yaqing – Industry and Information Technology Minister said in a press briefing “Right now the number of new energy vehicle businesses is too great, and is in a small and scattered state” according to CNBC.
In an industry report by Qichacha there are 321,000 EV manufacturers in China which saw its surge from the beginning of this year to August by 81,000.
According to the Chinese state agency, Beijing targets to acquire 20% of global EV market share by 2025.
Xiao’s comments further included China currently has too many EV manufacturers and the government needs to consolidate the industry to make the industry “bigger” and “stronger”.
Addressing the auto chip shortages, the ministry commented the government is working on to find alternative solutions to the supply chain issue. Earlier the Chinese authorities penalized three auto chip manufacturers on driving price up.
The comments followed EV stocks prices to dip listed on various exchanges, NIO Inc (NYSE: NIO) -1.22%, Xpeng Inc (HKD:9868) -2.35 % and BYD (HKD:1211) -2.14%.
Pessimism on the Chinese gaming law, Tencent (HKD:700) fell 2.45%. On the other hand, Chinese authorities’ intention of breaking up Alipay from Ant group led to Alibaba (HKD:9988) inching down by -4.23%. In accumulation of these crackdowns the market reacted sharply resulting in the Hang Seng index to dip 392.10 points on closing.