Exclusive | JPMorgan’s top EV banker sees a ‘resurgence of activity’ as China’s US$200 billion market consolidates, foreign players boost presence

JPMorgan leads Asia-Pacific M&A league table so far this year, having been involved in 27 deals worth US$64.2 billion, according to Bloomberg data

Marriage of foreign capital and Chinese technology ‘is a very powerful theme,’ says Peter Yu, co-head of diversified industries and technology in the region

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Things are getting busy again for bankers in China’s EV industry, JPMorgan says.

Published: 8:00am, 31 Aug 2023Updated: 10:37am, 31 Aug 2023

China’s electric-vehicle (EV) industry is becoming a brighter spot for JPMorgan Chase’s top deal bankers as the crowded domestic market faces pressure to consolidate and foreign manufacturers jostle for a bigger stake in the world’s biggest market.

Recent transactions involving BYD, Nio, Xpeng, Volkswagen and BMW are fuelling hopes that mergers and acquisitions (M&A) will make the industry a fertile ground for deal-making after two years of muted opportunities for investment bankers in Asia-Pacific.

“We are at the beginning of a resurgence of M&A activity,” Peter Yu, co-head of diversified industries and technology for Asia-Pacific at JPMorgan based in Hong Kong, said in an interview. Some carmakers “will just fall away, others will be potentially acquired,” he added.

Foreign OEMs investing in Chinese technology is a powerful theme, says Peter Yu, co-head of Asia-Pacific diversified industries and technology at JPMorgan Chase. Photo: Handout

China’s 200-odd licensed EV producers in its US$200 billion domestic market are expected to hand over 40 per cent more vehicles – 9 million units – in 2023, the industry association estimated, after deliveries surged 114 per cent in 2022. Annual capacity in was four times the output in 2020, according to a private industry report.

Efforts to boost economies of scale and profitability will lead to more M&A activity among Chinese companies, Bain & Co said in a report in January. The value of strategic M&A transactions across industries in China dropped 34 per cent to US$304 billion in 2022, it said, while the global tally declined by about one-third to US$2.6 trillion.

JPMorgan led the M&A league table in Asia-Pacific this year through August with 27 deals worth US$64.2 billion across all industries, according to Bloomberg data, giving it an 11.7 per cent share of the market. Morgan Stanley, UBS, Nomura and Citigroup rounded out the top five players.

A crossover between technology and industries such as automotive presents big opportunities for deals, Deutsche Bank’s head of investment banking Fabrizio Campelli said in an interview last month. The German bank’s clients in Europe were keen to expand their footprint in Asia, he added.

.css-sioo19{color:#c79a00;}Exclusive | JPMorgan’s top EV banker sees a ‘resurgence of activity’ as China’s US$200 billion market consolidates, foreign players boost presence

Exclusive | JPMorgan’s top EV banker sees a ‘resurgence of activity’ as China’s US$200 billion market consolidates, foreign players boost presence