Didi Bostock, editor at EV research firm Rho Motion, analyses some of the often overlooked smaller EV automakers and their likely fate for 2025.

The EV market in flux, smaller producers struggle in 2024, but some see positive performance

The EV market is a one where giants dominate, leaving little room for challengers to carve out their space.

While innovation fuels this industry, the brutal reality is that survival often hinges on sheer scale. In 2024, many smaller EV manufacturers, those selling fewer than 150,000 units per year, found themselves struggling to keep pace, facing production pauses, strategic pivots and, in some cases, a complete market exit. However, this is not a uniform story. Regionally, the fate of smaller players has diverged. Beyond China, some companies have shown resilience, even making headway.

Smaller Chinese EV makers are slowly being squeezed from the market

The Chinese market remains one dominated by select players with the top 15 EV players accounting for over 90% of 2024 sales. Consequently, this has led to many smaller brands being squeezed in market opportunities unable to compete on overall vehicle prices. Poor sales leading to low revenues, ultimately rendering production facilities economically unviable. With the market dynamics shifting, only those who can scale or differentiate stand the chance of seeing strong success.

How did Chinese players respond to a challenging market?

Heading into 2024, many mid-level players with stronger sales figures, surpassing 150,000 units annually, experienced positive growth, such as Leapmotor, Nio and Xpeng. On the other hand, lower-tier players found themselves struggling.

• Human Horizons paused production in February and filed for pre-bankruptcy restructuring in August, leading to a sales drop of over 94% from 2023 to 2024.
• Neta halted production in November amidst reports of staff pay cuts and an inability to meet salary obligations. The company had recorded losses of just under USD1 billion in both 2022 and 2023 and its year-on-year sales have since declined by 47%.
• Former market notables HYCAN, Aiways and Skywell have also all faced steep sales declines, struggling to compete in an increasingly competitive environment.

Aiways notably announced its intention to exit the Chinese market and shift its focus to Europe, while Skywell has sought expansion into the UK to offset declining domestic sales. HYCAN, originally a Nio joint venture, paused production in November after reducing its workforce to just 50 employees.

What is the outlook for small EV OEMs in China?

The outlook for smaller-tier Chinese EV manufacturers appears increasingly bleak. As legacy OEMs, both domestic and international and top-tier players such as BYD and Tesla scale their efforts in China, the opportunities for growth among smaller brands continue to shrink. In 2023, the likes of Niutron, Letin, Evergrand New Energy Auto and WM Motors exited the market after their businesses proved untenable.

Yet, paradoxically, the broader EV market remains in expansion. Rho Motion’s data shows that China’s EV sector grew by 40% in 2024 compared to 2023, mirroring a global EV market growth of 25%.

This growth has allowed some new, small players to gain market share. The most recent EV market entrant in China, Xiaomi, performed well in 2024, with its sales surpassing 130,000 units, beginning to rival many other more established players. However, this company already has a strong brand identity in China.

For small EV players brand identity is becoming an increasingly critical factor. Smaller EV makers are struggling to establish strong brand presence and recognition, further hindering their ability to compete in a competitive market.

How does the story differ for ex-China OEMs? 

Outside of China, smaller EV makers experienced a more positive year.

• Lucid achieved its strongest sales to date, surpassing 10,000 units for the first time, a 92% year-on-year increase.
• Turkey’s Togg recorded approximately 30,000 sales, marking a 54% growth compared to the previous year. This success largely reflects the expansion of Turkey’s BEV market, which grew by 54% in 2024 compared to 2023.
• Rivian delivered 3% more units in 2024 than in 2023 and exceeding its own expectations.

However, despite their growth, these automakers all remain unprofitable, heavily reliant on debt and equity financing. A significant drop in EV sales could prove catastrophic for these companies, given their current financial vulnerabilities.

What’s next?

The EV market is a high stakes game, and recent years have underscored how tough the competition can be. Smaller players struggling to compete on price, brand or technology will face mounting challenges in the years ahead. Yet, even as some exit the stage or pivot their strategies, one thing remains certain, the EV market will continue to grow, adapt and evolve.