NEV sales crater in China domestic market space. Dominant Chinese manufacturers are squeezing out smaller manufacturers.
China has and is pushing export of its models overseas. However to facilitate that increase they are building factories overseas to dodge tariffs. With the decline of domestic sales that likely means idle production capacity and employee layoffs ultimately affect China’s economy in addition to the real estate downturn/collapse, to say nothing China’s demographic issues.
China has pulled its tax rebate [January 1, 2026] impacting new sales just like in the USA.
The slowing China EV juggernaut eases the pressure on US manufacturers. But just temporarily, as I expect the dominant China manufacturers will weather the storm.
The early trio of U.S.-listed Chinese electric car startups — Nio, Xpeng and Li Auto — failed to make the top 10 sellers for the month, despite improvements in monthly deliveries.
Market concentration has increased sharply. The top ten manufacturers now account for around 95% of the Chinese new energy vehicle market — up sharply from around 60% to 70% just two or three years ago, according to Xiao Feng, co-head of China Industrial Research at Citic CLSA. New energy vehicles include battery-electric and hybrid-powered cars.
UBS predicts the growth rate of China’s electric car sales to roughly halve next year from around 20% in 2025.
The market is already saturated
China’s EV Sales Collapsed By Nearly 20%, And Germany’s Big Five Are Down To 1.6% | Carscoops
China’s EV Sales Collapsed By Nearly 20%, And Germany’s Big Five Are Down To 1.6%
Sales data shows EV registrations fell to 1.2 million units in China in the first quarter, largely due to the expiration of a tax rebate on new purchases. The entry-level segment took the brunt of it, where subsidies had previously covered up to a third of the purchase price.
To offset slowing demand, many competitors have introduced creative financing solutions, such as long-term low-interest loans, including 0% five-year offers.