BYD, the world’s largest electric-vehicle maker, has warned that China’s hyper-competitive car market faces a dramatic shakeout, with as many as 100 brands expected to disappear following Beijing’s crackdown on aggressive discounting.

Speaking at the Munich motor show, BYD executive vice-president Stella Li said China’s car industry had reached unsustainable levels of competition. “Some of the original equipment makers will be pushed out,” she said, arguing that even 20 carmakers would be “too much” for the domestic market to sustain.

China currently has around 130 manufacturers of battery electric vehicles (EVs) and plug-in hybrids, but government officials have moved to clamp down on steep price cuts — known locally as neijuan or “involution” — which have been blamed for worsening deflation. Li argued that the end of price wars would benefit larger and more technologically advanced players like BYD, as consumers shift focus from bargain prices to quality and innovation.

Consulting firm AlixPartners estimates that out of the 129 EV and hybrid brands selling in China last year, only 15 will remain financially viable by 2030. Rival EV maker Xpeng has gone further, predicting the global auto industry could shrink to just 10 dominant companies over the next decade.

Despite its scale and global reach, BYD has also felt the pressure. The company reported weaker-than-expected profits and revenues in the second quarter, citing Beijing’s curbs on long-term supplier payments and tighter rules around discounting. Citi analysts have cut forecasts for BYD’s annual sales from 5.8 million vehicles to 4.6 million this year, with slower growth projected through 2027.

Nevertheless, Li downplayed the longer-term impact of government intervention, insisting the company’s profitability would remain strong. She predicted more Chinese automakers would expand overseas to offset domestic pressures but warned that markets in Europe and beyond would not be easy. “The overseas market is not that simple,” she said.

BYD is already making inroads abroad, competing with Tesla for the top spot globally. It has expanded aggressively into the UK and European markets by offering affordable EVs with advanced software. The company remains on track to begin manufacturing in Hungary later this year, though Li cautioned that scaling up production would take time.

Other Chinese manufacturers are also looking abroad. State-owned Changan has launched in the UK, while Leapmotor, backed by Stellantis, is weighing production in Spain despite Europe’s higher tariffs on Chinese-made EVs.