Chinese new automotive sales, including exports, grew 9.4% on the year to a record 34.4 million in 2025 to mark a fifth consecutive increase in figures out January 14.
The numbers from the China Association of Automobile Manufacturers (CAAM) show strong performances by emerging automakers Leapmotor and Xiaomi as market leader BYD and other major players struggled. Competition continued to intensify throughout the sector.
“Growth in sales of electric vehicles and other new energy vehicles (NEV) led China’s automotive market,” CAAM deputy secretary-general Chen Shihua said during a news conference.
With NEV sales increasing 28.2% to 16.49 million units, the category’s share of the total grew seven percentage points to 47.9%. Within the NEV category, EVs rose 37.6% to 10.62 million units, while plug-in hybrids increased 14% to 5.86 million.
Sales have been propped up by official support. Government trade-in subsidies are more generous for new NEVs than for new gasoline-powered models, accelerating the shift toward NEVs.
Overall, domestic sales rose 6.7% to 27.3 million vehicles, while exports increased 21.1% to 7.09 million. Exports of NEVs roughly doubled.
Chinese brands’ share of passenger car sales rose 4.3 percentage points on the year to 69.5% in step with higher NEV sales. Foreign brands, meanwhile, were slow to adopt electrification, leading German brands’ share to shrink 2.5 percentage points to 12.1%, while Japanese brands lost 1.5 percentage points to 9.7%. Honda Motor’s struggles stood out, with its annual sales plunging roughly 20%.
Results were also mixed among Chinese brands. Consumers sought affordable EVs and driver assistance features, and automakers responding quickly to that demand logged sales growth. Leapmotor performed particularly well among emerging brands, expanding its low-priced lineup with the B01, an EV sedan starting under RMB 100,000 (USD 14,000). Leapmotor’s sales roughly doubled on the year to 590,000 vehicles.
Companies from other industries were also notable for their sales growth. Xiaomi, a major smartphone maker that entered the EV market in March 2024, sold around 410,000 vehicles. Major telecommunications hardware maker Huawei also saw higher sales for vehicles through its Harmony Intelligent Mobility Alliance (HIMA) network, which includes five different brands, thanks largely to its driver assistance functions. Huawei provides technology for smart vehicles but is not itself an automaker.
BYD, which had recorded annual sales growth of 40% or more since 2021, logged only an 8% rise in 2025. Major state-owned automaker Guangzhou Automobile Group (GAC) saw its Aion brand hit a slump as well, with sales falling for a second straight consecutive year.
Competition is likely to continue to intensify in 2026. CAAM forecasts that new car sales, including exports, will increase just 1% on the year to 34.75 million vehicles.
Exports are seen climbing 4.3% to 7.4 million units. Even as expectations rise for further growth in Europe and elsewhere abroad, the projections for China are conservative.
Domestic sales taken alone are expected to grow just 0.2% to 27.35 million vehicles. The halving of an NEV tax credit in 2026 will make it harder to encourage consumers to buy.
An ecosystem characterized by excessive competition, colloquially known in English as “involution,” is becoming the norm in the Chinese market. Steep discounts and price cuts weigh down automaker profits and also negatively impact payment terms between automakers and parts makers, prolonging the already harsh environment for the industry as a whole.
Leapmotor, which saw strong sales in 2025, aims to sell one million units for 2026, up 70% or so. Geely Group also hopes to catch up with BYD, setting a target of 5 million vehicles for 2027. Large state-owned automakers and some emerging players, meanwhile, are likely to continue to struggle for sales—a trend some fear could lead to a restructuring and thinning out of the industry.
“Only companies that are able to keep up with changing technologies will survive,” Chen said of NEV makers in the Chinese market.
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.