The electric vehicle sector is experiencing its “most exciting moment” – and a consolidation in the industry is inevitable, says Helen Liu of Bain & Company.

“I would say that consolidation is an inevitable trend in this industry,” Liu, a partner in the consulting firm, told CNBC’s Capital Connection on Tuesday. She cited reasons such as the capital-intensive and technology-heavy nature of the electric vehicle sector.

“Historically, we’ve seen invisible hands like the market, and also visible trends, regulations that continually navigated the industry through the consolidation trend,” she said.

On Monday, China’s Minister of Industry and Information Technology the country has “too many” EV manufacturers. These comments sparked fears about further regulatory action by Beijing, this time targeting the autonomous vehicle sector after earlier moves in other industries such as private education and technology.

IHS Markit’s Huaibin Lin said he saw little chance of regulatory interference from Beijing in the short term. Demands by the industry and information technology ministry for a consolidation of the auto sector are not new and have taken place in the last 20 years, he told CNBC’s “Squawk Box Asia” on Tuesday.

“We are in [an] an ever-growing market where we have seen tremendous growth in automotive sales over the past 20 years, “said Lin, manager China Automotive at IHS Markit, adding that the new energy vehicle market is currently experiencing very strong momentum.

“Are we going to see any drastic consolidation in the industry itself? We think there will be a big question mark as long as the market goes on,” he said.

For the next 10 years you will see very fierce competition within the new energy vehicle industry. Nobody knows who will actually survive in the end.

Helen Liu

Partner, Bain & Company

Liu of the consulting firm Bain agreed, saying that the momentum for growth and the outlook for the sector are currently very positive. This is underpinned by factors such as supporting guidelines and, above all, customer acceptance.

“Based on our Bain study this year, we found that the acceptance of electric cars by Chinese customers is leading global trends and we also believe it is steadily increasing,” she said.

China’s electric boom

For its part, China previously mentioned that it would be happy By 2025, 20% of all new cars sold are to be New Energy Vehicles.

Still, the two analysts say it’s too early to say who could be a clear winner in China’s EV space.

“I think it might be a little too early to say which brand or name will win in the end,” said Liu of Bain.

Read more about electric vehicles from CNBC Pro

Beyond domestic competition, IHS Markit’s Lin said China’s electric car makers are also expected to face increased capital competition over the next decade.

Some of this competition could come from long-standing established companies in the automotive sector, he said, with traditional internal combustion engine vehicle manufacturers such as: Volkswagen, BMW and Daimler’s Mercedes is now forging “drastic” electrification strategies.

“You will see very fierce competition in the new energy vehicle industry for the next 10 years,” Lin predicted. “Nobody knows who will actually survive in the end.”