The electrical car sector is seeing its “most enjoyable second” now — and consolidation within the sector can’t be averted, says Bain & Firm’s Helen Liu.

“I’d say that consolidation is an inevitable pattern on this trade,” Liu, companion on the consultancy agency, informed CNBC’s “Capital Connection” on Tuesday. She cited causes corresponding to the electrical car sector’s capital intensive and tech-heavy nature.

“Traditionally, we’ve got seen invisible arms just like the market and in addition seen developments, rules, navigated the trade by way of the consolidation pattern repeatedly,” she mentioned.

On Monday, China’s minister for trade and data expertise the nation has “too many” EV makers. These feedback sparked fears of additional regulatory motion by Beijing, this time focused on the autonomous car sector following earlier strikes in different industries corresponding to non-public training and expertise.

IHS Markit’s Huaibin Lin mentioned he sees a low likelihood of regulatory intervention by Beijing within the short-term. Calls by the trade and data expertise ministry for consolidation of the auto sector will not be new and have been occurring within the final 20 years, he informed CNBC’s “Squawk Field Asia” on Tuesday.

“We’re in [an] ever growing market the place we’ve got been seeing large development for the previous 20 years in auto … gross sales,” mentioned Lin, who’s supervisor of China automotive at IHS Markit. He added that the brand new power automobiles market is at present seeing very robust momentum.

“Are we going to see drastic consolidation inside trade itself? We expect there is a massive query mark over it so long as the market retains going,” he mentioned.

Liu from consultancy Bain concurred, saying that development momentum and the outlook for the sector each look extremely constructive in the mean time. That is backed by elements corresponding to supportive insurance policies and most significantly – buyer acceptance.

“Based mostly on our Bain research this 12 months, we’ve got discovered that really, the Chinese language clients’ acceptance to the EV is main the worldwide kind of developments and in addition, we predict that is growing repeatedly,” she mentioned.

China’s electrical automobile sector is seeing speedy development, with tens of 1000’s of firms leaping on the bandwagon and shares of Chinese language electrical automobile makers corresponding to Nio and Xpeng surge, in line with enterprise database Qichacha.

For its half, China talked about beforehand that it might like 20% of recent vehicles offered to be new power automobiles by 2025.

Nonetheless, the 2 analysts say it is too early to say who could be a transparent winner in China’s EV house.

“I consider that it could be somewhat bit too early to inform which model or which identify will win on the finish,” Bain’s Liu mentioned.

Past competing domestically, IHS Markit’s Lin mentioned China’s electrical automobile makers are additionally anticipated to deal with elevated capital competitors within the subsequent decade.

A few of this competitors may come from longstanding incumbents within the auto sector, he mentioned, with conventional inner combustion engine car makers corresponding to Volkswagen, BMW and Daimler’s Mercedes now developing with “drastic” electrification methods.

“Within the subsequent 10 years, you are gonna see a really fierce competitors throughout the new power car trade,” Lin predicted. “No one is aware of who truly goes to outlive in the long run.”