Chery Boss Says 90% of Chinese Automakers Are Losing Money

About 90% of Chinese automakers are losing money, according to Zhang Guibing, president of Chery International, the overseas arm of one of China’s biggest car groups. Speaking to Australian journalists in China in late October, Zhang warned that many of these companies will not survive as the cost of developing new cars keeps rising.

Asked how many brands would survive the price war, Zhang was blunt. “Most Chinese car manufacturers are listed on the stock market and release financial reports. Looking at those reports, I think most of them, maybe around 90 per cent, are losing money,” he told CarExpert. “Too many companies, surely later will die, will disappear.”

Why Chinese Automakers Are Losing Money

Zhang pointed to research and development costs. Today’s cars depend on batteries, software and driver assistance, so “the investment is much higher than before,” he said.

Overcapacity makes it worse. China built around 35 million vehicles last year, while its annual production capacity is estimated at about 55 million. Sohu reported earlier this year that the industry’s profit margin fell to 3.2% in the first quarter of 2026.

Independent Data Points the Same Way

Zhang’s figure is his own estimate, but outside research tells a similar story for electric car makers. In its 2026 Global Automotive Outlook, published in June, consultancy AlixPartners found that only three of China’s 30 new energy vehicle (NEV) focused automakers were profitable for the full year 2025. That group is narrower than the whole industry Zhang described.

AlixPartners expects only seven of those 30 companies to break even by 2030. It forecasts consolidation to speed up, with weaker brands exiting the market or being bought, including by foreign investors. The firm also expects China’s light vehicle sales to fall 10% in 2026 to 24.6 million, after an 18% drop in the first five months of the year.

Exports Are the Escape Route

With the home market shrinking, Chinese brands are pushing hard overseas. AlixPartners projects Chinese automakers will export nearly 10 million vehicles in 2026, up from 7.1 million in 2025, and expects Chinese brands to reach a 16% market share in Europe by 2030. Newcomers such as Leapmotor are already pricing cars like the Leapmotor B03 against the Renault 5 to win European buyers.

Chery itself is one of the profitable ones. The Hong Kong listed company reported a net profit of 9.02 billion yuan (roughly $1.3 billion) for the first half of 2026, down 9% year on year, and overseas customers made up 69.1% of its revenue, up from 46.3% a year earlier. The group is also betting on new technology, having set a 2027 deadline for solid-state battery road tests.

Not every brand is struggling. Xiaomi, which entered the car business only recently, is preparing to bring its EVs to Europe by 2027. Still, if Zhang and AlixPartners are right, many smaller brands will vanish before 2030, which matters for buyers abroad who rely on parts, updates and warranty service.