global automated industry will be reduced to 10 companies over the next decade, says a senior Chinese executive. Xpengas the battle for market share in electric vehicles intensifies competition.

Brian Gu, vice president of Xpeng, said that for Chinese companies to be viable, they need to sell at least 3 million vehicles annually. The world’s largest automaker Toyota sold 10.5 million vehicles in 2022, while Tesla sold 1.3 million.

The warning comes at a historic moment for the global automotive industry. China is expected to overtake Japan as the world’s largest car exporter, surpassing Germany last year.

“In 5-10 years it will be a much smaller market. I think the (number of) players will probably drop to less than 10,” Gu told the Financial Times.

However, he predicted that the market would stabilize in the second half of this year. “This year, I think we are facing a very competitive environment,” he said. “Obviously there is pressure” that not only creates competition, but also causes hesitation among consumers.

Xpeng, which was founded in 2014 and raised $1.5 billion in a 2020 initial public offering in New York, has faced stiff competition in China. In the first three months of the year, it ranked 12th in sales among electric vehicle manufacturers in China. The company, which sold more than 120,000 vehicles in 2022, suffered a loss in the first quarter of the year, with sales dropping nearly 50%.

According to the Financial Times