Chinese EV maker prepares for survival test in 2026 by accelerating global expansion

BEIJING – China’s electric car boom will come to a quiet end in 2025, with sales sluggish and analysts warning that fierce price competition is likely to continue.

Not only did tesla Data from the China Passenger Car Association from January to November showed sales were down 7.4% year-on-year, while market leader BYD also reported a 5.1% decline.

BYDpassenger car sales fell a further 26.5% year-on-year in November alone, while vehicles equipped with Huawei’s software and new rivals such as Huawei models also declined. xiaomirecorded sales growth of over 90% during the same period.

Three early U.S.-listed Chinese electric vehicle startups — Nioh, Spen and lee auto — Even though our monthly deliveries improved, we weren’t able to break into the top 10 sellers for the month.

Market concentration is rapidly increasing. The top 10 manufacturers now account for about 95% of China’s new energy vehicle market, jumping from about 60% just a few years ago to 70%, said Xiao Feng, co-head of China industry research at CITIC CLSA. New energy vehicles include battery electric vehicles and hybrid vehicles.

“Although price is more important than specific brands, we will continue to see more consolidation in the industry,” he said. “Obviously, buyers won’t buy a car they’ve never heard of.”

The scale of the price cuts underscores the pressure. Autohome, an online platform for Chinese car sales data, also lists vehicles by discount rate, such as a 432,000 yuan ($61,660) price cut on the Mercedes-Benz EV and a 147,000 yuan price cut on the Volvo XC70.

Paul Gong, head of China auto research at UBS, said while domestic policy changes are likely to weigh on growth next year, he expects price competition to continue for “many years”.

He said the Chinese government plans to reimpose input taxes while reducing trade-in purchase subsidies. UBS predicts that China’s electric vehicle sales growth rate will be cut by almost half next year from about 20% in 2025.

According to the China Passenger Car Association, new energy vehicles accounted for 59.4% of new passenger cars sold in China in November, and the market is already saturated.

Slowing domestic demand has forced Chinese electric car makers to aggressively expand overseas, where profit margins are often higher.

Hangzhou-based Geely Automobile announced that its electric vehicle exports quadrupled in the first half of this year, reaching 184,000 total vehicle exports. The company has expanded its reach to around 90 countries during that time, entering Australia, Vietnam and four other markets. The company has also set up factories in Egypt, the Middle East and Indonesia.

Geely ranks second in China’s new energy vehicle sales after BYD.

BYD is also expanding its overseas production, including a new factory in Hungary that plans to ramp up production in 2026. The company exported more than 131,000 cars in November alone.

Tu Lee, founder and managing director of consulting firm Sino Auto Insights, expects more Chinese automakers and battery companies to “firmly stake their claim in Europe” and competition from the U.S. and Tesla to come closer.

Other foreign car companies remain keen to capture a piece of the Chinese market.

German car giant volkswagen Established local joint venture with Xpeng and Chinese automotive chip designer horizon robotics. Volkswagen’s largest research and development center outside Germany is in Hefei, China, and last month Volkswagen announced that for the first time it could complete all stages of the vehicle development and approval process locally.

This feature will help Volkswagen launch cars more quickly in China, with several new models planned for 2026.

In the first three quarters of 2025, Volkswagen delivered more than 17 million vehicles in China, an increase of 8.5% year-on-year. This far exceeds the 8.9 million units delivered in Western Europe.

China’s market size remains favorable to foreign companies. “That’s not lost on U.S. automakers,” said Le of Sino Auto Insights.

He noted that General Motors still delivers nearly 2 million cars a year in China and, like Ford, exports cars from the country. If automakers can design vehicles that can compete in China, he said, they can bring manufacturing capacity home, noting that “that’s where GM is closer than Ford.”

Le warned that it may be too early for domestic and foreign automakers to declare victory in the world’s biggest car market.

“But in China, you might be on top one month, then the next quarter you’re playing catch-up and wonder what happened.”