(Yicai) Sept. 19 -- The 15 Chinese new energy vehicle startups that are struggling or have gone bankrupt amid cut-throat competition have total idle capacity of almost 3.8 million cars a year, according to Yicai’s calculations based on public information.

The embattled startups, including Aiways Holdings, Singulato Motors, Enovate Motors, Proton Holdings, LeSee, China Evergrande NEV Group, Baoneng Motor Group, Saleen Automotive, Qiantu Motor, Levdeo Automobile, have plans to invest CNY600 billion (USD82.3 billion) building plants with annual output in excess of 10 million units after raising over CNY100 billion.

Of the 34 factories planned, eight are in Jiangsu province, five in Zhejiang province, three in Jiangxi province, and two in Guangdong province, with annual production capacities of 1.9 million, 1.2 million, 800,000, and 1.7 million, respectively.

Businesses, entrepreneurs, and investors have rushed into the vehicle business in recent years because of the optimism about the auto market boosting the economy, a source at an industry association told Yicai. Affluent local governments have signed off on numerous car projects, while local authorities that lack the funds have sold bonds to finance them, the person said.

Though local governments intend the projects to boost their gross domestic product and tax revenue, they are unfamiliar with auto technologies, which can easily lead to investment mistakes, according to Fu Yuwu, honorary president of the China Society of Automotive Engineers.

Guidance targeting mergers, acquisitions, and restructurings in the car industry is needed to weed out those automakers that have fallen behind, adjust and optimize the industrial structure, and prevent and resolve the risk of structural overcapacity, Lu Weisheng, director of the National Development and Reform Commission’s industry department, said at a recent forum.

Editors: Zhang Yushuo, Futura Costaglione