These are uncertain times for electric car startup companies in China, despite the fact that the NEV (New Energy Vehicle - plug-in vehicle) market is booming.
As it turns out, the Chinese government is apparently considering tighten its support under the country's strategic policy, limiting the number of new licences for EV startups to maybe just 10.
A cap of "10" would effective wipeout most of the over 200 companies dreaming about being the next major EV carmaker.
"New regulations are expected to pull the plug on many of the 200 plus companies that make up China's electric car industry. The government is imposing strict standards on technology and could cap the number of manufacturers. Bloomberg's Kongho Chua reports on "Daybreak Asia.""
Other recent news that fits the climate of this story is the recently discovered lack of approval to sell electric cars in China for LeEco. It's not necessarily directly related to this upcoming change of policy, but well...the lack of special permissions/allowences in China could certainly hurt when you invest millions or billions.
Stepping back, one has to ask, why would China intend to limit the number of EV companies, instead of just let them fail or consolidate over time?
Some believe there is a growing EV-bubble in China, because very high incentives, and this move could be an effort to try and defuse that bomb, or it could just be the old fashion"favortism" thing rearing its head.