12 Nov State of China’s Auto Market – October 2025
Written by Bill Russo, Founder & CEO of Automobility Ltd.
Before diving into the results through the third quarter of 2025 for China’s auto market, I’m proud to share the fourth episode of our Auto Insider podcast—the latest in a series of candid conversations with industry leaders who are shaping the future of mobility and navigating the fast-evolving mobility solutions landscape.
In Episode 4 of Auto Insider, I sit down with Michael Wu, Co-President of Leapmotor, one of China’s fastest-rising smart EV makers. Our discussion highlights how Leapmotor’s landmark partnership with Stellantis is redefining the model for global collaboration in the EV industry. From vertically integrated electronics to software-defined mobility, Leapmotor is building a new blueprint for how Chinese innovators can expand globally while retaining their core innovation DNA. This conversation sheds light on the future of EV competition and cooperation—don’t miss it!
Key Headlines Summary through September 2025
- China remains on track to surpass the 2024 shipment peak, with exports holding near 20% of total volume — still ~64% ICE powered.
- NEV shipments +35% YoY (+2.9 M units), lifting penetration +7.5 ppts to nearly half of total production.
- Exports +14.8% YoY (+638 k units), with September hitting a record 652 k units; momentum led by Mexico, Australia, the Philippines, and Middle East markets.
- Domestic sales +12.5% YoY, supported by trade-in subsidies and aggressive pricing campaigns.
- Chinese brands now at ~69% domestic PV share, capturing all YoY growth while foreign brands have lost one-third of their share since 2020.
- Tesla volumes remain flat, with Giga Shanghai exports at all-time lows amid an aging lineup.
- Smart EV competition reshuffles again: HIMA retains leadership, Xiaomi and Leapmotor sustain strong momentum, while Li Auto and Xpeng slip from the monthly top 10.
- From exports to “glocalization”: Chinese OEMs accelerate overseas factory builds as tariffs drive localization.
- Used-car sales +3% YoY, reflecting value-conscious consumers and a maturing secondary market.
Subsidies and Exports Power China’s Auto Growth
Ex-factory vehicle shipments rose 12.9% through the third quarter of 2025, with Made-in-China exports accounting for roughly 20% of total volume. Combined passenger and commercial vehicle shipments reached 24.4 million units, keeping the market on pace to exceed the 2024 record peak of 31.4 million units.
New Energy Vehicle (NEV) shipments surged 35.0% year-on-year, contributing an additional 2.9 million units, while Internal Combustion Engine (ICE) shipments declined 0.9%, down 116,000 units compared with the same period last year.
August shipments rebounded to 2.86 million units, up from July’s 2.59 million, with both passenger and commercial vehicles posting strong year-over-year gains. The market has now delivered sustained double-digit growth through the first eight months of 2025, powered by surging NEV demand and record exports of Made-in-China vehicles. Extended trade-in subsidies and aggressive pricing by local automakers continue to reinforce passenger vehicle momentum.
September shipments reached a total of 3.23 million units, the highest volume month of the year thus far. Both passenger and commercial vehicle volumes maintaining solid double-digit year-over-year growth.
The China market is on track for a record volume year over last year’s peak shipments, driven by sustained NEV momentum and robust Made-in-China export performance.
Extended trade-in subsidies and aggressive domestic pricing strategies continue to provide powerful tailwinds supporting passenger vehicle demand.
China’s Auto Exports Accelerate to Record Levels
Exports of Made-in-China (MIC) vehicles remain on a record-breaking trajectory, rising 14.8% year-on-year through the third quarter of 2025. Total exports reached 4.95 million units, already approaching the full-year 2024 total. New Energy Vehicles (NEVs) now account for 35.5% of all exports, with volumes up sharply to 1.76 million units, easily surpassing last year’s total. BYD has emerged as the strongest growth driver, adding over 400,000 incremental exports year-on-year and capturing about 40% of China’s total NEV exports, while Tesla’s share slipped to 10% amid declining shipments from Giga Shanghai.
Through August 2025, Mexico remained the top destination for Made-in-China (MIC) vehicles, with shipments up 12% year-on-year. The United Arab Emirates (+58%), Australia (+67%), and the Philippines (+69%) posted especially strong growth, while Kazakhstan surged 89% to enter the top ten export destinations for the first time. Russia, by contrast, saw exports plunge 59% due to steep vehicle recycling fees functioning as de facto import tariffs—underscoring both the opportunities and vulnerabilities facing Chinese automakers as they expand globally.
China’s NEV Market Matures as BEVs Outpace Hybrids
China’s NEV shipments reached 11.23 million units through the third quarter of 2025, including roughly 1.76 million vehicles exported overseas. NEVs now account for ~46% of all vehicle shipments, reflecting their expanding dominance in both domestic and export markets. While Battery Electric Vehicles (BEVs) continue to lead growth, Plug-in Hybrids (PHEVs) have seen their share slip to around one-third of NEV output — a sign of a maturing market as consumers shift more decisively toward BEVs amid broader charging network expansion and improving cost competitiveness.
PHEV shipments rose 19.7% year-on-year through the third quarter of 2025, reflecting solid growth in absolute volume. However, their share of total NEV shipments has continued to decline, slipping to around 34% in September, down from a peak of 44% in mid-2024. This trend underscores a gradual loss of momentum for hybrids, as Chinese consumers increasingly favor battery electric vehicles (BEVs) amid improving charging infrastructure and stronger price competitiveness. Still, PHEVs remain strategically important in export markets, where charging access and grid reliability continue to limit full BEV adoption.
NEVs Take Command: China’s Auto Market Enters a New Era
Domestic vehicle sales rose 11.1% through the third quarter of 2025, sustained entirely by strong NEV demand, which jumped 28.1% year-on-year. ICE sales declined 0.9%, reinforcing that virtually all market growth in China now comes from electrified vehicles. This represents a historic inflection point — NEVs have evolved from a niche to the core driver of domestic sales momentum. With policy support, trade-in subsidies, and aggressive pricing continuing to accelerate adoption, automakers are prioritizing scale and share over margin, cementing China’s position as the global leader in the transition to electrified mobility.
Amid intensifying competition, China’s passenger vehicle market has reached a historic turning point — New Energy Vehicles (NEVs) have not only overtaken internal combustion engine (ICE) vehicles but are expanding their lead each month. Through the third quarter of 2025, NEVs accounted for 52% of total passenger vehicle sales, rising to a record 58% in September. This firmly establishes ICE models as a permanent minority in China’s market, with electrification now the dominant and accelerating trajectory driving industry transformation.
While BYD’s market share has slipped below 29%, it remains the clear leader of China’s NEV market, holding five of the top ten best-selling models. The market remains highly concentrated, with the top six players accounting for 60% of total sales and the top ten capturing nearly 79%.
Chinese brands dominate the leaderboard, with Tesla the only foreign entrant, holding 4.9% share but continuing to lose ground amid an aging lineup and intensifying local competition. Geely’s share has climbed to 12.3%, fueled by the success of its value-priced Xingyuan models, while BYD’s share loss since 2024 has likely prompted their predatory pricing tactics.
Notably, most of China’s top NEV players—including BYD, Geely, SAIC, and Changan—originated as ICE automakers, underscoring that legacy carmakers can successfully transform and thrive in the electrification era, even as startups like Leapmotor, Li Auto, and Xpeng remain challengers at the margin.
Through the third quarter of 2025, the NEV passenger vehicle market has decisively surpassed ICE, with 8.87 million NEVs sold, compared to 8.14 million ICE vehicles. The NEV segment is increasingly concentrated, led by BYD with 29% share, followed by Geely (12%), SAIC (8%), and Chang’an (7%), collectively accounting for more than half of total NEV sales.
Li Auto’s position has weakened amid rising competition in the Smart EV segment and a cooling PHEV market—categories where it once led but now faces mounting pressure from rivals. Meanwhile, the ICE market remains dominated by global legacy players such as Volkswagen (22%) and Toyota (13%), though Geely, Chery, and Chang’an have emerged as credible domestic challengers, signaling a clear shift in brand leadership as electrification reshapes the industry.
Note that only 4 brands (highlighted in red) are ranked as top 10 players for both ICE and NEV, and they are all Chinese: Geely, Chery, Chang’an and SAIC.
Chinese Brands Dominate as Foreign OEMs Retreat
Foreign automakers continue to lose ground in China’s passenger vehicle market, having surrendered 33 percentage points of share since 2020. Through the third quarter of 2025, local brands captured 69.0% of shipments, up sharply from 36% five years ago, and accounted for all of the market’s year-over-year growth.
By contrast, foreign brands remain in decline: German OEMs fell 5.7% year-on-year, Japanese brands dropped 4.2%, while U.S. automakers edged up 1.9% after steep losses in 2024. The data underscore a structural power shift, with Chinese automakers firmly consolidating dominance as global OEMs struggle to sustain relevance in the world’s most competitive auto market.
BYD has reinforced its position as China’s leading passenger vehicle group, with 2.54 million units sold (14.9% share) — driven entirely by its all-NEV lineup. Volkswagen remains in second place at 1.90 million units (11.2%), though its electrification progress continues to lag, with NEV sales down over 50% year-on-year.
Geely has surged to third place with 1.88 million units (11.0%), propelled by a 107% jump in NEV sales and a balanced ICE/NEV mix, emerging as the fastest-growing large-volume automaker in China. Toyota (1.15 million, +5.8%) stands out as the only global brand with sustained growth, while Chang’an (1.05 million, +12%) and SAIC (1.01 million, +26%) continue to strengthen their NEV portfolios.
Tesla, with 432,700 units (2.5%), remains the only foreign brand with meaningful NEV presence but saw a 6% sales decline amid rising local competition. Overall, domestic automakers are widening their dominance, accounting for nearly all the market’s +9.2% year-on-year growth, as global OEMs face stagnation and erosion of share.
Conclusion
China’s auto market in 2025 has entered a new phase of dominance and disruption. New Energy Vehicles (NEVs) now account for the majority of passenger car sales, and local brands command nearly 70% market share, driving all of the industry’s growth. Exports are surging to record highs, with Chinese automakers expanding global reach through accelerated “glocalization” strategies.
Intensifying neijuan competition continues to fuel innovation and price aggression, prioritizing scale and market share over margins. The center of gravity in the global auto industry has shifted decisively toward China—where homegrown players are now defining the technologies, business models, and tempo of the mobility transition, while foreign brands fight to remain relevant in the world’s most competitive market.
AmCham Shanghai State of China Auto Market Monthly Webinar [October 23]
Join us on Thursday, October 23 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 September 2025 and highlight recent news from the world’s largest and most progressive automotive market.
Webinar | State of China Auto Market Monthly Briefing (October)
37th DVN Lighting Workshop – Shanghai [October 29-30]
Bill Russo will deliver a keynote speech on Wednesday October 29 in Shanghai at the 37th DVN Lighting Workshop on the topic How China’s Digital Ecosystems are Re-Shaping Intelligent Connectivity.
DVN Shanghai 2025: Bill Russo on China’s Digital Ecosystems
AutoSens & InCabin China 2025 – Hefei [November 18–20]
We are proud to once again support AutoSens & InCabin China 2025, taking place November 18–20 in Hefei. This world-class gathering brings together over 350 senior leaders from OEMs, Tier 1s, semiconductor firms, and startups to explore the cutting edge of ADAS, validation, simulation, and intelligent cockpit innovation. With China at the forefront of mobility transformation, the event offers a unique platform for global experts to connect, share insights, and shape the future of in-cabin and perception technologies.
In support of the event, Automobility has contributed to the ADAS Guide, a comprehensive reference highlighting the evolution from traditional driver-assist systems to fully integrated intelligent driving platforms. The guide profiles leading players across the global ecosystem and underscores China’s emergence as the epicenter of innovation in intelligent driving.
Learn more and join us in Hefei:
ADAS to Smart Driving: Automobility at AutoSens & InCabin China
CoMotion GLOBAL – Riyadh [December 7-9]
We are excited to be part of the inaugural CoMotion GLOBAL, taking place December 7–9, 2025, in Riyadh, Saudi Arabia. Positioned at the crossroads of Asia, the Middle East, Europe, North America, and the Global South, this flagship gathering brings together global leaders from government, industry, finance, and technology to shape the future of multi-modal, sustainable, and urban-first mobility. Backed by strong local support and aligned with Saudi Arabia’s Vision 2030, CoMotion GLOBAL will serve as the ultimate East-meets-West platform for unveiling innovations, forging strategic partnerships, and charting the next wave of mobility transformation.
https://www.comotionglobal.com/
AUTOMOBILITY ARTICLES
China’s Auto Supply Chain Revolution: A Strategic Playbook for Global Auto Players
🚗⚡️ China is no longer just the world’s largest auto market — it’s the hub shaping the future of mobility.
Our latest article, “China’s Auto Supply Chain Revolution: A Strategic Playbook for Global Auto Players,” explores how the industry is splitting into three worlds by 2030 — and why what happens in China will not stay in China.
Through case studies of Autoliv, Magna, and Aptiv, we highlight how leading suppliers are embedding in China’s innovation ecosystem and leveraging partnerships to stay globally competitive.
🌏 For global suppliers, the message is clear: China is no longer optional. The winners of the next decade will innovate from China, scale with China, and export alongside China.
AUTO INSIDER PODCAST
Auto Insider Podcast: Episodes #1,#2 and #3
🎙️ Catch Up on the First 3 Episodes of the Auto Insider Podcast hosted by Bill Russo. Insights from the front lines of China’s mobility transformation — where speed, scale, and strategy are redefining global competition.
🚗 Episode #3: Competing at China Speed: A Tier-1 Perspective from Magna with Zhen Wu, President of Magna China
🦋 Episode #2: The Butterfly Effect—How China’s Auto Shift is Reshaping the World with Dr. Xiaozhi Liu, Founder and CEO of ASL Automotive, Former CEO of Fuyao Glass
🔧 Episode #1: Smart EVs and the Smart Tier 0.5 Supply Chain with Jack Cheng , Co-Founder of NIO and CEO of M-Mobility
We’re just getting started — more conversations coming soon with the visionaries shaping the future of mobility.
AUTOMOBILITY MEDIA
China won the electric car race. Up next: freight trucks
🚛 China won the EV car race — now it’s targeting freight trucks
Chinese automakers already account for 80% of global electric truck sales, and they are rapidly expanding to Europe, Latin America, and beyond. With supportive government policy, cost competitiveness, and vertically integrated supply chains, China has built a decisive lead in a segment that remains nascent elsewhere.
💬 My perspective (quotes featured in the piece):
“They bring cost competitiveness, manufacturing know-how, and proven technology stacks. In many ways, they act as enablers for global fleet operators who want to decarbonize but lack local suppliers at scale.”
“The key lesson is that electrification succeeds when supported by aligned policy, ecosystem investment, and end-market adoption incentives. However, replicating China’s speed will be difficult. Few other countries combine China’s industrial scale, vertically integrated supply chain, and top-down policy coordination.”
🌍 The next wave of disruption is coming to freight mobility. With trucks contributing disproportionately to transport emissions, China’s ability to scale solutions globally could reshape logistics and accelerate the path to decarbonization.
Source: https://restofworld.org/2025/china-electric-freight-trucks/
China auto price war rages on despite regulatory crackdown
Nikkei Asia, September 12
🚗 China’s auto industry remains locked in a fierce price war — even as regulators attempt to cool “disorderly competition.”
📈 NEVs now make up over half of domestic sales, yet chronic overcapacity means automakers are fighting for survival through relentless promotions and affordable model launches.
🇨🇳 With factories able to produce nearly twice the number of vehicles sold last year, exports have become an even more urgent priority. A record 116 Chinese companies exhibited at IAA Mobility 2025 in Munich — outnumbering exhibitors from Korea, Italy, and the US combined.
💬 As I told Nikkei Asia:
“Regulators are discouraging some of the more aggressive discounting, and they’re tightening the payment rules. But with so much capacity chasing demand that, while growing, is finite in size … tactical price cuts are still inevitable.”
The real challenge? A mismatch between installed capacity and actual demand — especially as the market shifts rapidly from ICE to EVs. This imbalance ensures that global expansion will remain at the center of Chinese automakers’ strategies.
Xiaomi, the Chinese Carmaker That Succeeds Where Apple Failed
L’Express, September 14
🚗📱 Xiaomi succeeds where Apple failed
Xiaomi Technology’s leap from smartphones to cars has been nothing short of remarkable. Its first EV, the SU7, sold 130,000 units in 2024, showcasing the power of China’s scale, supply chains, and consumer appetite for tech-driven products.
I’m honored to be quoted in this L’Express article, where I noted how China’s system allows companies to “iterate quickly, launch fast, and correct mistakes without delay.” This agility, combined with Xiaomi’s brand strength, explains much of their early success.
English translated article 👉
https://coats-share-oiq.craft.me/RFGIYWT19LMBaY
The full article (in French) is here 👉
Can China stop its EV price wars?
Financial Times, September 15
🚗💡 Honored to be quoted in the Financial Times on the challenges facing China’s auto industry as it navigates intense competition, shrinking margins, and government pressure to curb “involution” (excessive price wars and overcapacity).
Key takeaways from the article:
-
Beijing is signaling that unchecked discounting and reckless investment threaten the sector’s long-term sustainability. -
Despite warnings, carmakers are still prioritizing scale and technology over near-term profitability. -
Exports are surging as Chinese brands seek relief from a saturated home market, intensifying trade tensions abroad. -
Analysts expect gradual—not immediate—consolidation, with government support cushioning weaker players.
My perspective, as quoted in the article:
🔹 “It’s a game of chicken. If succeeding requires scale and getting scale requires discount pricing, scale is more important than profits.”
🔹 “The anti-involution campaign is Beijing’s way of signalling that destructive price wars and unchecked capacity expansion are threatening the long-term sustainability of an important sector. While the government may act to tap the brakes here, it doesn’t want to change the direction of the industry.”
👉 The full article underscores a critical truth: China’s EV transition is irreversible, but the path forward must balance growth with sustainable economics.
Why China Is Trying to Tame Its Electric Car Frenzy
New York Times, September 2
🚗⚡️ China’s EV market is the world’s most dynamic – and most brutal.
In today’s The New York Times, Keith Bradsher takes a deep look at Beijing’s struggle to rein in the frenzied competition that has powered China’s rise to global EV leadership – but also triggered price wars, overcapacity, and financial strain across the supply chain.
I shared two perspectives:
💡 “This is not just a race to the bottom – it’s a race to dominance. Chinese automakers are sacrificing near-term profitability to secure long-term leadership, both at home and abroad.”
📉 “Tesla, once the trailblazer in China, is now losing ground with year-over-year sales declines – a worrying sign given the pressures on its global business.”
Key points from the article:
🔹 EVs and plug-in hybrids now make up more than half of China’s monthly car sales.
🔹 Over 120 brands compete, yet only a fraction are expected to be financially viable by 2030.
🔹 Fierce competition is fueling extraordinary innovation – from BYD’s AI-powered SUVs with drones to GEELY’s luxury EVs.
🔹 Beijing faces the challenge of curbing excess without crushing the very ecosystem that is reshaping the global auto industry.
📖 Read the full piece here: https://lnkd.in/gNGrwpCB
China’s EV transformation is messy, costly, and disruptive – but it’s also the proving ground for the future of mobility worldwide.
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
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