This report does not constitute a rating action. China's EV charge is reshaping the automotive value chain. As automakers prioritize market share over profitability amid the electrification shift, persistent cash burn will erode weaker players’ liquidity and force them out of competition. We expect industry consolidation to gather pace later in the decade, although government and shareholder support will delay some exits. Product appeal, cost efficiency, technological capability, and balance sheet resilience will determine the ultimate winners. The competitive fallout is rippling beyond automakers, upending the ways that dealerships and auto insurers work. Dealers heavily exposed to traditional internal combustion engine (ICE) brands or unproven EV platforms are experiencing margin compression and liquidity constraints. Survivors will need to navigate shrinking
