07 Jul State of China’s Auto Market – June 2025
Written by Bill Russo, Founder & CEO of Automobility Ltd.
Before diving into the latest insights on China’s auto market through May, I’m excited to share the second episode of our “Auto Insider” podcast—a series that features candid conversations with industry pioneers shaping the future of mobility and navigating the evolving landscape of transportation.
In this episode, I’m joined by Dr. Xiaozhi Liu, Founder and CEO of ASL Automotive. A highly respected global executive, Dr. Liu brings leadership experience from General Motors and Fuyao Glass, and currently serves on the boards of Autoliv and Johnson Matthey. She was recently named the inaugural China Ambassador by FISITA, the leading international society for automotive engineers. With a career spanning North America, Europe, and Asia, Dr. Liu offers invaluable perspective on technology-driven transformation in the global auto industry.
Our conversation explores “The Butterfly Effect” transforming the global automotive landscape. Just as a caterpillar undergoes metamorphosis, the industry is evolving—becoming lighter, smarter, and more connected. Dr. Liu offers compelling insights into how early shifts in policy, technology, and consumer behavior are reshaping supply chains, altering competitive dynamics, and redefining the very concept of mobility.
You can stream the Auto Insider podcast on your favorite platform—and don’t forget to like, follow, and subscribe to stay updated on future episodes!
YouTube: https://www.youtube.com/watch?v=O5A0a6NleOQ
Spotify: https://open.spotify.com/episode/3GciuAnkUz4RwgVHbzL5LA
China Auto Market Highlights Through May
- Vehicle shipment volumes in China rose by double digits YTD 2025, driven by NEV demand, extended trade-in subsidies, and aggressive pricing.
- New Energy Vehicles (NEVs) are the only consistent growth segment in China, now accounting for ~43% of production YTD 2025.
- Exports account for ~20% of China’s auto production in 2025, with BYD and Tesla together making up over half of NEV exports.
- Top export destinations include Mexico, Australia, and the Middle East; Russia dropped due to higher import fees.
- Domestic sales are up ~10% YTD, largely driven by policy support and pricing actions; BYD’s recent price cuts expected to impact future sales trends.
- NEVs have outsold gasoline powered passenger vehicles in China since March.
- Foreign brands have lost significant market share, now down to 31%, with local brands commanding 69% of PV sales.
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Geely, BYD, and Xiaomi gained share through competitively priced EVs; NEV market is concentrated among a few dominant local brands.
Subsidies and Exports Supercharge NEV Growth as ICE Fades
Vehicle shipments have risen by 10.9% in the first five months of 2025, with exports of Made-in-China products rising 7.9%. Combined shipments of passenger and commercial vehicles amounted to 12.7 million units.
Shipments of New Energy Vehicles (NEVs) were up 44%, equating to an increase of 1.71 million units, whereas Internal Combustion Engine (ICE) vehicle shipments declined by 6.1%, a drop of 461,000 units compared to the same period last year.
BYD Fuels Surge in NEV Export Share
Exports of Made-in-China (MIC) vehicles rose 7.9% year-over-year, with New Energy Vehicle (NEV) exports surging toward a record high in 2025. NEVs now account for 34.3% of total MIC exports year-to-date—driven almost entirely by BYD’s aggressive global expansion. BYD alone increased its exports by 203,000 units compared to the same period last year.
In contrast, Tesla’s MIC exports declined by 46,000 units. BYD and Tesla combine for 55.4% of MIC NEV exports.
As of April, Mexico remains the top export destination for Made-in-China (MIC) vehicles, with volumes up 26% year-over-year. Exports to the Middle East and Australia also recorded strong gains. In contrast, demand in Russia declined sharply due to steep increases in vehicle recycling fees—effectively acting as tariffs—which significantly raised import costs.
Chinese Carmakers Power Ahead in the NEV Race
Year-to-date domestic sales have risen by approximately 10%, largely driven by the extension of vehicle replacement subsidies. Recent aggressive pricing—spearheaded by BYD—is expected to offer a short-term boost, but also reflects growing anxiety among automakers facing intense competition and persistent overcapacity pressures.
NEVs now represent over 41% of total vehicle sales across both passenger and commercial segments.In the passenger vehicle category alone, NEVs have reached a 49% share and have consistently outsold gasoline-powered vehicles since March. We expect NEVs to surpass ICE vehicles in full-year passenger vehicle sales for 2025—a pivotal milestone in the industry’s transition.
In the first five months of 2025, BYD led the market with 1.26 million units sold and a commanding 28.9% share of the NEV segment. Geely group secured the second position with 571,000 units, underscoring its rapid ascent. Market concentration continues to intensify, with the top 10 NEV manufacturers now accounting for nearly 80% of total sales—over 61% of which is held by the top five alone.
Significantly, five of the top six NEV players—BYD, Geely, SAIC, Chang’an, and Chery—are traditional ICE automakers. Their success in the NEV segment is not incidental; it reflects the strategic advantage of having an established legacy business that can finance the transition to electric mobility. These companies also benefit from well-known brands, mature supply chains, and entrenched distribution networks—key assets in gaining scale and consumer trust in the evolving NEV landscape.
Tesla’s position in China’s NEV market has clearly weakened. In addition to a loss of 46,000 Made-in-China (MIC) export units, Tesla’s domestic market share has slipped to 4.6%. Year-to-date sales through May reached 202,000 units—down 7.8% from the same period last year, signaling mounting pressure from increasingly competitive local brands.
As of May, Xiaomi’s SU7 has already surpassed Tesla’s Model Y in sales—a sign of the brand’s accelerating momentum. With the upcoming launch of the YU7, Xiaomi is well-positioned to consistently outperform Tesla’s aging lineup in the Chinese market. BYD continues to dominate with five of the top 10 best-selling models, while Li Auto’s mid-priced L6 has overtaken the Model 3, pushing it off the list of China’s top 10 best-selling nameplates.
The surge in NEV passenger vehicle sales has clearly shifted market power toward Chinese brands. Global automakers that once dominated the era of gasoline-powered cars are rapidly losing ground as the NEV transition accelerates. Notably, no legacy foreign brands appear among the top 10 NEV players—highlighting the extent to which local brands now lead the charge in China’s electric vehicle revolution.
Chinese Brands Dominate as Geely Surges Past VW
Chinese brands share of domestic passenger vehicle market share in the first quarter reached 68.7%. Year-over-year growth of Chinese brands was 26.4%, with losses almost uniformly coming from all other countries of brand origin.
BYD has solidified its position as the market leader by achieving a 20.9% increase in overall volumes compared to last year. Meanwhile, the Geely Group has experienced remarkable growth, surging by 64% and surpassing the VW Group to claim the second spot.
Bill Russo Interview at BNP Paribas’ Global Electric Vehicle and Mobility Conference 2025
Bill Russo delivered a keynote address at the 2025 Global Electric Vehicle & Mobility Conference, hosted by BNP Paribas in Hong Kong in May 2025. He also participated in a sideline interview, where he shared insights on Intelligent Connected Vehicles.
Join us on Thursday, June 19 at 9am China time for the monthly AmCham Shanghai for regular State of China Auto Market Monthly Webinar, where we will review the latest market results through February and highlight recent news from the world’s largest and most progressive automotive market.
Webinar | State of China Auto Market Monthly Briefing (June)
ORIGINAL ARTICLES
In addition to this newsletter, Automobility provides frequent commentary on the scaling of innovation happening globally and in China. We have recently published thought pieces on topics linked to the future of mobility and energy. Please follow the links below to access our
original articles:
Article 1: Auto Shanghai 2025: How China is Rewriting the Rules of the Global Automotive Game
Our takeaways from the Shanghai Auto Show, please see the following Automobility Ltd original article and my interview with Bloomberg TV from the show floor.
Article 2: Addressing the Lightweighting Problem: Is Giga Die Casting the Ultimate Answer?
The automotive industry is undergoing one of the most significant transformations in its history. At the core of this evolution is the global pivot toward electrification, driven by the need to enhance energy efficiency and reduce environmental impact. Electric vehicles (EVs) have emerged as a cornerstone of this shift, offering cleaner alternatives to internal combustion engine (ICE) vehicles. However, they also introduce new engineering challenges— chief among them is the demand for lightweight designs to extend driving range and reduce energy consumption.
- Shares in China’s CATL jump over 16% in Hong Kong debut after biggest IPO of the year [CNBC]
According to Bill Russo, founder and CEO of investment advisory firm Automobility Ltd, the watchlist designation, coupled with Trump’s latest tariffs on China, may complicate the company’s U.S.-related business.
However, the impact on its global ambitions will likely be limited unless broader multilateral restrictions follow, as CATL’s core strategy remains focused on markets such as Europe and emerging regions, he said.
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CATL: The Quiet Chinese Battery Giant the Whole World Depends On [L’Express]
Between 2015 and 2019, China maintained a strict “white list”: only vehicles with locally produced batteries qualified for subsidies. “You had no choice but to buy Chinese. CATL benefited, unlike BYD, which did both cars and batteries—you wouldn’t buy from a direct competitor. That’s how companies like Geely, Beijing Auto, SAIC, and later Tesla and BMW, turned to CATL,” explains Bill Russo, former Chrysler executive and founder of Automobility Ltd in Shanghai.
…Many can design great batteries—but few can produce them at scale. “Henry Ford didn’t invent the car—he democratized it. China is doing the same for EVs, by vertically integrating the most expensive components,” adds Russo.
Original article in French language:
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Xiaomi Delays Release of First SUV After Fatal Road Accident [Bloomberg]
“The problem with the way self-driving features have been sold is it’s caused people to think that they can be less attentive to the way the car is actually performing,” Bill Russo chief executive officer of Automobility Ltd, a Shanghai-based consultancy, said at the Shanghai auto show on Wednesday.
“You still need to monitor the car. I think that’s what we’re going to hear more of — regulators trying to step in to make sure we’re not calling it autopilot or full self-driving.”
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Automobility’s Russo on Tariff Impacts [Bloomberg Video]
Automobility CEO Bill Russo predicts China’s car makers will go global in response to Trump Tariffs (Source: Bloomberg)
Automobility’s Russo on Tariff Impacts [VIDEO]
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China’s investments in electric vehicles yield success [ABC News Video]
ABC News’ Britt Clennett got a first-hand look inside China’s success at bringing electric vehicles to the masses with battery technology that rivals or beats American know-how.
Source: https://youtu.be/VoTlfOz5zoM
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How the EU’s reliance on China has exposed carmakers to trade shocks [Radio France Internationale]
“For the last 30 or so years, the global auto industry has moved toward markets that can lower the overall cost” of cars for sale, Bill Russo, CEO of Shanghai-based car industry watchdog Automobility, told RFI.
Russo said the measures create “additional friction to the system, adding additional costs”, which will result in “less competitive pricing among the domestic industries that have relied on low-cost country sourcing”.
“By increasing costs of components, you’re increasing the price of the vehicle or decreasing margin. When you do that, you shrink your market,” Russo explained.
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Porsche slashes outlook as US tariffs, China slump dim prospects [Reuters]
Bill Russo, CEO of Shanghai-based advisory firm Automobility, said Chinese customers of electric cars had been drawn to domestic brands because of their improved technological offering.
“No foreign company believed that the Chinese could somehow build equity that was superior to the foreign brands, especially the Europeans.”
Full article: https://www.reuters.com/business/autos-transportation/porsche-cuts-full-year-sales-outlook-2025-04-28/
About Bill Russo
Bill is a contributing author to the book Selling to China: Stories of Success, Failure, and Constant Change (2023), where he describes how China has become the most commercially innovative place to do business in the world’s auto industry – and why those hoping to compete globally must continue to be in the market.
About Automobility
Contact us by email at info@automobility.io
PLEASE NOTE: The information and analysis shared in this newsletter, including the charts and style of materials presented, is the intellectual property of Automobility Ltd. While we share it as a way to serve our existing and new clients, it is not to be used without our express consent and then only with attribution. Any publication, reproduction or other use of this material without the express written consent of Automobility Ltd is prohibited.
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