Here, on November 2, 2025, two Xiaomi electric car models in different colors are photographed.
Sopa Images | Light Rocket | Getty Images
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’s sales decline 7.4% year-on-year, market leader BYD also reported a 5.1% decline, according to data from January to November from the China Passenger Vehicle Association.
BYD’s passenger car sales in November alone fell by a further 26.5% year-on-year, while new rivals such as vehicles equipped with Huawei’s software and Xiaomi models posted sales increases of more than 90% over the same period.
Three early U.S.-listed Chinese electric vehicle startups (Nio, Xpeng, and Li Auto) missed out on the top 10 sales rankings for the month, despite improved monthly vehicle deliveries.
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 their cars.” [have] I’ve never heard of it. ”
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.
Overseas expansion
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 exports of electric vehicles quadrupled in the first half of this year, with total vehicle exports reaching 184,000 units. 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.
Foreign automakers
Other foreign car companies remain keen to capture a piece of the Chinese market.
German car giant Volkswagen has established a local joint venture with Xpeng and Chinese automotive chip design company 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.
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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.”
Mr. 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.”
