The Ongoing Collapse of the Western Car Industry Q3 2025: Asia & Africa

China

The Chinese EV market continues to grow at over 30% per year, with an EV market share of over 60% looking possible in 2025. That would reduce the ICEV market end of year share from 52% to 40% or less, a drop of nearly one quarter in market share. With probable overall car market growth in the mid to high single digits that would still represent a volume drop of about 15-20% for ICEV sales. The market also exhibits intense levels of competition, where even the most successful companies are allowed no time to rest on their laurels. At the same time, foreign brands are increasingly using China as an export platform for sales outside the United States while also making BEV and PHEV models that are either just re-branded Chinese brand models or are utterly dependent upon Chinese suppliers for their core technologies (batteries, electric motors, driver assistance software etc.).

Quarter 1 Quick Review

In the EV segment, BYD market share peaked in Q3 2024 at 34.6% and declined to 28.8% in Q1 2025, as competition from other Chinese automakers heated up. Most especially from a Geely that went from 7.7% market share in Q3 2024 to 13.3% market share in Q1 2025. Other notable market share gainers were Changan (5.8% to 6.5%), Chery (3.3% to 4.8%), Xpeng to 3.6% and Leapmotor to 3.3%. Xiaomi also more than doubled sales of the SU7 between Q2 2024 and Q1 2025. The major losers were Tesla (6.5% to 5.6%, even with 5 year 0% financing and insurance incentives on the Model 3) and Li Auto (4.5% to 3.8%). SAIC remained relatively stable in market share. BYD has greatly increased its exports in the past five months, reaching 79,000 in April 2025 (up 93% y-o-y). GAC had flat y-o-y sales for its Aion EVs while its ICEV sales continued to fall.

The Japanese manufacturers showed great desperation in attempting to gain some EV segment share by introducing extremely cheap EV models which were developed locally in China; with some being not much more than rebadged Chinese brand vehicles. Also slashing prices for some of their other non-BEV models. The German manufacturers have shown little ability to gain in EV market share, driving VW to announce very major price cuts in February and then discounting heavily against those new list prices. The starting price of the VW ID.4 was cut to RMB 139,000 (US$19,300), but even then it is more expensive than the competitor BYD Yuan Plus which starts at RMB 119,800 (US$16,650). Even with these measures, sales of VW BEVs fell from 41,000 in Q1 2024 to only 25,900 in Q1 2025, a fall of 36.8%. The Geely Galaxy E5 starts at RMB 112,800 (US$15,750). Even with deep price cuts, VW cannot compete with the Chinese brands in China. In Germany the VW ID4 starts at about Euro 40,000 (US$ 45,000) and in the US about US$42,000.

In the first quarter of the year, the foreign brand share of the Chinese market was 37%, down from 39% for the whole of 2024. The biggest foreign brand losers were Nissan (down 27.5 y-o-y), Honda (down 23.7%) and BMW (down 17.2%) and to a lesser extent Mercedes (down 10%) and the VW Group that includes Audi and Porsche (down 7% overall), while Toyota (up 3.6%), Mazda (up) and Hyundai-Kia (flat) show relative strength. The sellers of ICEVs were aided by the ongoing Chinese trade-in incentives, that provide RMB 20,000 for a new EV and 15,000 for a new ICE vehicle; the major reason why the overall car market is up over 10% y-o-y.

Quarter 2

April: 1.755 million sales, up 14.5% y-o-y. Domestic brands 65.5% share, with sales up 31% y-o-y and taking market share from the foreign brands.

• EV: 905,000 (up 33.9% and 51.5% share), of which BEV: 559,000 (up 38.2%), PHEV: 260,000 (up 25.9%), EREV: 86,000 (up 32.7%). By brand:

  • BYD: 268,778 (29.7% share); Geely: 119,000 (13.1% share); Changan: 61,000 (6.7% share); SAIC-GM-Wuling: 52,000 (5.7% share); Chery 36,977 (4% share); Li Auto: 34,000 (3.8% share); Xpeng: 31,000 (3.5% share); Tesla: 28,731 (3.2% share); Xiaomi: 29,000 (3.2% share); Leapmotor: 28,000 (3.1% share); HIMA 27,555 (3% share); Nio 23,900 (2.6%); Dongfeng 23,872 (2.6%).

• Overall market share by brand:

  • BYD: 268,778 (15.3%); Geely: 210,000 (12%); VW: 194,000 (11%); Toyota: 125,000 (7.1%); Changan: 105,000 (6%); Chery: 95,000 (5.4%); SAIC-GM-Wuling: 61,000 (3.5%); Great Wall Motor: 55,000 (3.1%)

May: 1.93 million sales, up 13%. Domestic brands 65.2% share, slightly lower than in April.

• EV: 1,021,000 (up 28% and 52.9% share), of which BEV: 607,000 (up 22.6%), PHEV: 298,000 (up 32.3%), EREV: 116,000 (up 51.5%). By brand:

  • BYD: 293,021 (28.5%); Geely: 130,398 (12.7%); Changan: 73,933 (7.2%); SAIC-GM-Wuling: 56,155 (5.5%); Chery 44,924 (4.4%), HIMA 43,903 (4.3%); Leapmotor 41,409 (4%); Li Auto 40,856 (4%); Tesla 38,588 (3.8%); Xpeng 33,525 (3.3%); Great Wall Motor 32,638 (3.2%); Xiaomi 28,013 (2.7%); Dongfeng 25,244 (2.5%); Nio 23,231 (2.3%).

• Overall market share by brand:

  • BYD: 293,021 (15.1%), VW: 212,000 (11%), Geely: 205,093 (10.6%), Changan: 135,330 (7%), Toyota: 131,240 (6.8%), Chery: 100,360 (5.2%), SAIC-GM-Wuling: 65,260 (3.4%), Great Wall Motor: 57,900 (3%).

June: 2.084 million sales, up 18.1%. Domestic brands 64.2% share, one per cent lower than the previous month. German brands 16.1%, Japanese brands 12%, American brands 5.8%.

• EV: 1,111,000 (up 29.7% and 53.3% share), of which BEV 661,000 (up 33.1%), PHEV 334,000 (up 32.4%), EREV 116,000 (up 7.8%). By brand:

  • BYD: 352,081 (31.7%); Geely: 114,798 (10.3%); Changan: 76,346 (6.9%); Tesla: 61,484 (5.5%); HIMA: 52,585 (4.7%); SAIC-GM-Wuling: 51,258 (4.6%); Leapmotor: 44,921 (4%); Chery 39,919 (3.6%); Li Auto: 36,279 (3.3%); Great Wall Motor 32,992 (3%); Xpeng 30,832 (2.8%); Dongfeng 28,375 (2.6%); GAC Aion 25,901 (2.3%); Xiaomi 25,459 (2.3%); Nio 24,925 (2.2%).

• Overall market by share brand:

  • BYD: 352,081 (16.9%); VW 239,660 (11.5%); Geely: 196,013 (9.4%); Toyota 139,013 (6.8%); Changan: 129,208 (6.2%); Chery: 114,620 (5.5%); Great Wall Motor: 62,520 (3%); Tesla 61,484 (2.9%).

In April, the Geely Geome Xingyuan BEV became the best selling car in China, priced (from RMB 69,800) at a BYD Seagull level but equal to the bigger BYD Dolphin, with 36,119 sales; its fourth monthly sales record in a row. BYD responded by slashing prices on its Dynasty and Ocean series by between 10% and 34% until June 30th (but in reality these price cuts may become permanent). For example, the price of the BYD Seagull was cut to RMB 55,800 (US$7,800) from RMB 69,800 (US$9,500) down 20%, the price of the Seal 05 DM-i was cut to RMB 59,800 (US$8,300) from RMB 79,800 (US$12,400) down 25%, and the Seal 07 DM-i was cut to RMB 102,800 (US$14,260) from RMB 155,800 (US$21,610) down 34%. Basically, the Xingyuan reset market pricing and BYD responded.

These latest price cuts, especially on the DM-i PHEV models, have moved the price bar even lower for foreign models such as the Toyota Corolla HEV (RMB 129,800) and Camry HEV (RMB 179,800). With respect to those two models, the price of the Seal 06 Dm-i was cut by 23% to RMB 76,800 (US$10,650) and Seal 07 DM-i was cut by 34% to RMB 102,800 (US$14,260). The VW Passat Pro (a Seal 07 equivalent PHEV) starts at RMB 233,150; VW has already been massively discounting its list prices to stop its sales from utterly collapsing. Geely responded to the BYD price cuts, creating a possible downward spiral of response and counter-response. For example, the best-selling and already hyper-competitively priced Xingyuan super mini EV got a limited time discount of RMB 9,000 to RMB 59,800 (US$8,320); a Chinese ID.3 equivalent for US$8,320!

The Geely Galaxy Starship 7 Em-i (Geely’s equivalent of BYD’s DM-i) PHEV SUV, the size of a Toyota RAV4, VW Tiguan (RMB 261,050 for the PHEV), or BYD Sealion 6, has had its price discounted from RMB 97,800 to RMB 79,800 (US$11,070). Even the ICEV VW Tanyue L with a “limited time price” is still RMB 176,900. And Geely just keeps adding to the pain, with the Geely Galaxy A7 EM-i PHEV mid-sized sedan that has 2,100km of range and a claimed fuel consumption of 2 litres per 100km (112 mpg); starting at RMB 97,800 (US$13,620).

Then there is the updated Geely Galaxy E5/EX5 mid-sized SUV BEV which has a new extended range version with a 610km CLTC range, with the base model starting at RMB 89,800 (US$12,455) with the latest price cuts. If these new lower price levels stick they will not be good news for Tesla’s stripped down “cheap” E41 model.

Leap Motor may have a massive sales winner on its hands, to extend the sales success it has been having recently, with the B01 BEV sedan starting at RMB 105,800 (US$14,670) during pre-sales; available in 500km and 650km (RMB 135,800: US$18,830) CLTC cruising range versions. Prices could quite possibly fall by at least RMB 10,000 for the full launch. Its ADAS makes use of a roof-mounted LiDAR, 11 cameras, five millimetre-wave radars, and 12 ultrasonic sensors (vs. the vision only ADAS that the Tesla Model 3 uses). Pretty much a Model 3 clone with better ADAS sensors at less than half of the price. Leap is matching the discounted pricing of the likes of BYD and Geely, and also the desperation BEV pricing of the Japanese manufacturers.

Leap Motor has also launched its heavily upgraded mid-sized C11 SUV BEV/EREV, starting at RMB 149,800 (US$20,870). The BEV version has a longer range than, and a 0-100km/h acceleration comparable with, the base level Model Y that is close to twice the price. It also has an 800V platform (Model Y is 400V) capable of 30% to 80% charging in 18 minutes. The current Tesla pricing is very rapidly becoming utterly untenable.

SAIC GM Wuling (44% owned by GM, majority owned by SAIC), which mostly sells small cars, has also leapt into the Model 3 zone with its updated 2025 Wuling Starlight. The PHEV version starts at RMB 76,800 (US$10,670) and the BEV starts at RMB 99,800 (US$13,860). The top end BEV version goes for RMB 115,800 (US$16,080) and has a CLTC range of 610km and 7.3 second 0-100km/h; vs. RMB 235,000 for a Model 3 with 634km CLTC range and 6.1 seconds 0-100km/h. Is the Tesla really worth more than twice the price?

Its rapidly growing SGMW sales, up 18.5% y-o-y in June, have allowed SAIC to grow its overall sales by 21.5%; also helped by 80.6% growth at SAIC-GM, 13% growth at SAIC-VW, 15.5% at SAIC Motor and 31% at its export oriented SAIC Maxus brand. Its specialist BEV brand of SAIC-IM continues to fail with sales falling 15.2% in June. The Changan Deepal EV brand continues to grow sales rapidly, with sales (29,893) up 79% y-o-y in June, while the Avatr EV brand (j.v. between Changan, CATL and Huawei) sales (12,767) increased 173%. These have allowed Changan to keep growing sales by about 4% (including exports) as its ICEV sales fall.

Dongfeng’s Voyah EV brand grew sales (10,053) by 83%, but the company’s overall sales fell in June by 4% to 118,072; with Nissan and Honda sales representing more than half of Dongfeng’s sales. Voyah has released the extensively upgraded and changed Voyah Free full-sized luxury SUV PHEV, utilizing the Huawei ADAS and significantly improved levels of luxury and build quality. Yet another competitor for the foreign luxury full-sized SUVs

GAC, with its struggling Aion EV brand that sold 27,848 vehicles in June (down 20% y-o-y), saw its sales fall 8.22% y-o-y in June to 150,000. Of those sales, 30,999 were GAC-Honda (-9.65%), and 67,512 GAC-Toyota (-3.65%); GAC’s ongoing sustainability is totally tied to the success, or lack of success, of Toyota and Honda in the Chinese market.

Chery is adding insult to injury for the ICE vehicle manufacturers with the July 8th full launch of the Fulwin A9L EREV sedan, which was priced at its pre-launch event on April 23rd at RMB 159,900 (US$22,300) to RMB 229,900 (US$32,000); those prices may very well be adjusted downwards given the current market dynamics. And I was right, the full launch price is RMB 149,000 (US$20,890) to RMB 207,900 (US$29,000); one hour after the launch Chery had received 35,680 firm orders. Larger than a Tesla Model 3, with 27 sensors for the ADAS, it has a pure electric CLTC range of 260km and a combined range of 2,000km. The high end versions can do 0-100km/h in 4 seconds, with a top speed of 210km/h. It fulfils the Chery strategy of offering more features and luxury at a lower price than competitors.

In the pure EV space, Chery also brought out the iCar V23 BEV SUV late last year, “China’s Little Electric Land Cruiser”. A very good, and very affordable 4X4; starting at RMB 99,800 (US$13,700).

The foreign brands, with only 5.3% of their sales in June being EVs (compared to 75.4% for domestic brands) were greatly aided by the subsidies for the replacement of older cars with new ones; which covered both EVs and ICEVs. But even together with the widespread deep discounting of already significantly reduced list prices, this was not enough to stop foreign brand market share from falling from 37% in Q1 to 35% in Q2 (vs. 39% in all of 2024). Due to the relatively fast growth in the overall Chinese car market, 18.1% y-o-y in June, there was still the possibility of some volume growth for the foreign brands.

The Japanese brands were a mixed bag, Mazda was up 34.5% in June to a still small 7,446; aided by the new EZ-6 BEV (based on Changan’s EPA EV platform, RMB 139,800: US$19,200). It is also being exported from China to European and other nations; as the Mazda 6e.

Toyota sales were up 7.57% in June to 139,013, under-performing the overall market; even when helped by the bZ3X (RMB 109,800: US$15,100) and bZ5X (RMB 129,800: US$18,000) BEVs. Toyota announced that it is localizing new car development decision making to China in an attempt to remain relevant. The three most important parts of a BEV are the battery pack, the powertrain and the ADAS. The bZ3X is manufactured by Toyota’s joint venture with GAC, and is basically a rebadged GAC Aion V that utilizes the Chinese Momenta ADAS. The bZ5X was developed locally in China, and is built by the Toyota JV with FAW. It uses BYD LFP blade batteries, BYD electric motors and the Chinese Momenta ADAS.

These moves by Mazda and Toyota may help their sales, but represent a surrender to Chinese EV technology and Chinese manufacturing abilities. The extremely aggressive pricing also means that they may not be doing anything to benefit corporate profitability. Toyota may also start exporting its EVs from China. The company’s global sales have continued to increase, even in the US market, and its Chinese sales were only 16.5% of its 2024 global sales of 10.8 million in 2024. US sales were 21.6%, and Japanese sales were 17%; both markets heavily protected from Chinese competition. Toyota’s sales are very diversified geographically, with 14% in Asia ex-Japan & China, 11% in Europe and about 5% in both South America and the Middle East. It will probably be the most resilient of the Japanese manufacturers.

Nissan saw sales fall 1.6% y-o-y in June to 49,033. In the first half of the year it sold 279,546 personal vehicles which was a 18% fall from the 339,297 in the previous year; in an overall car market growing at over 10%. Nissan is also attempting the same short-term fix in the Chinese market with the Nissan N7 (RMB 119,900: US$16,500), a vehicle very heavily based on the Dongfeng eπ 007 and produced by the Nissan-Dongfeng JV; also using the Momenta ADAS. Nissan has also announced that it will be exporting cars from China to Southeast Asia and the Middle East and North Africa.

With Nissan sales also falling 6.1% in the US in Q2 (221,441) due to the tariff issues, with 45% of Nissan US sales imported from Japan and Mexico, and falling in the Japanese home market, Nissan’s decline into bankruptcy continues. It recently announced the closure of its Japanese Oppama plant as part of a reduction from 17 to 10 production plants, to reduce production capacity from 3.5 million to 2.5 million by 2028. Global sales are already trending below that 2.5 million number, significantly out pacing the reduction in capacity. With 40% of its sales in North America (locally produced), about 20% in China, 15% in Japan, and 11% in Europe, and continuing to fall across the board.

Honda saw sales fall 16.42% to 58,001 in June; in the first six months of the year it sold only 302,573 vehicles in China; compared to 852,269 for all of 2024. On current trends, Honda sales could struggle to be above 600,000 for 2025. Even with the overall car market growing at 14% aided by the trade in subsidies. Honda launched its own S7 (RMB 259,900: US$35,840) BEV SUV using CATL batteries and powertrain, and the Huawei ADAS. Produced by the Dongfeng-Honda JV (the GAC-Honda version is called the P7) and launched in April; it has not been a success.

Honda’s US sales got a short term boost from consumers wanting to buy pre-tariff imported vehicles, but that momentum swiftly dwindled by the end of Q2. Nearly two thirds of Honda’s US sales are made in the US, with the balance mostly made in Canada and Mexico; placing it in a better position than other foreign brands. Honda’s sales are heavily regionally concentrated, with about 1.7 million sales in North America on a yearly basis in 2025 (nearly all locally produced), probably below 600,00 in China, and 600,000 in Japan (falling slightly y-o-y), and only 75,000 in Europe. It is continuing its journey to being a North American company with a Japanese offshoot; with global sales of about 2.5 million.

SAIC-GM (i.e. not including SGMW) grew sales by 81% y-o-y in June, due to a 77% jump in Buick sales to 39,307 and a 258% jump in Cadillac sales to 7,516. With the Buick GL8 luxury 7-seat MPV PHEV becoming the only foreign brand car to be in the top 20 sales table for PHEVs and EREVs in June, at number 19. With the China-only Buick GL8 Lu Shang luxury 7-seat MPV PHEV being introduced in the second quarter of 2025, starting at RMB 249,900 (US$34,700) together with the new ICEV version of the GL8, the “Land Business Class” for only RMB 229,900 (US$31,900). These prices were significantly less than the ICEV Lu Zun (RMB 269,900) and the PHEV Lu Zun (RMB 339,900). The Lu Shang models are very well priced even compared to the Chinese brand offerings, showing that SAIC-GM’s list prices are becoming competitive. The equivalent US model, the Buick Enclave ICEV, has a base price of US$46,595. Buick has now announced a new Lu Zun, with the first 5C fast charging battery in a PHEV, which can be expected to be priced at less than the current version (the video below is quoting current prices).

These vehicles though are manufactured by SAIC-GM, using Chinese batteries, Chinese electric motors, and Buick has announced a strategic partnership with Chinese Momenta to develop its ADAS. In addition, about two thirds of GM cars sold in Mexico are built in China and that share may increase with the tariff issues between Mexico and the US. It could even do the same with respect to Canada, as the anti-China EV tariffs do not cover ICEV and PHEV models. None of this is good for the North American car industry.

In contrast to Buick and Cadillac, the Chevrolet brand saw a nearly 5% fall in sales to only 1,679 and there are already reports of GM shutting down its Chevrolet brand in China, because it is simply not competitive with the Chinese mainstream brands. This will leave just the two luxury brands Buick and Cadillac.

Changan-Ford saw a sales rise of 75% in its main brand to 22,538 sales, but its luxury brand Lincoln saw a sales fall of 63% to only 3,362 for the month. Ford is using China as an export hub to Southeast Asia, South America, Australia and Mexico. Models include those that cannot be found in the US, such as a BEV/PHEV Ford Bronco model and other models which are really just re-badged from its joint venture partner. Using Chinese batteries, Chinese electric motors and Chinese Momenta ADAS. The China-produced Ford Territory outsells the Ford F150 in Mexico, and Ford could increase its Chinese-made vehicle exports to Mexico, and possibly Canada, given the tariff disputes between them and the US. Kia sales were up 14.76% in June to 23.700, while Hyundai saw a rise of 9.76% to 15,942; both under-performing the overall market.

With respect to ADAS, we now have GM, Ford and Mercedes having adopted the Momenta ADAS, and BMW recently announced that is will also be doing so; representing a general surrender to Chinese ADAS technologies for many of the foreign brands. This is in addition to VW working with Xpeng on ADAS (based on the Xpeng-developed chip) and Audi working with I.M. Motors on ADAS. Given its partial ownership of the company, will Stellantis be doing the same with Leap Motor? With the batteries, electric motors, sensors and the ADAS coming from Chinese manufacturers, foreign brand EVs will help to embed Chinese technology leadership while hollowing out their own organizations. Even more so when using China as an export base for such vehicles, produced by joint ventures with Chinese companies.

Volkeswagen, through extensive discounting, managed to grind out a sales increase in Q2 of 2.8% that significantly lagged far behind overall market growth. This was an improvement over Q1 though, as sales for the first half of the year as a whole were down 2.3%. Sales of ICE vehicles were positive y-o-y, driven by significant official price reductions and discounting against those prices, together with the government trade in incentives. Unfortunately, this was not true for VW’s BEV sales which fell 36.8% y-o-y in Q1 to only 25,900, and 32.6% y-o-y in the seasonally stronger Q2 to 33,400. VW is only maintaining sales levels in a market growing at over 10% y-o-y through massive discounting on its ICE vehicles, while BEV sales are crashing; not a good strategy for profitability nor for future sales growth. Will VW be able to continue to sell cars in China at less than half their price in Europe and the US, and will that even maintain sales as the ICEV segment continues to lose market share? Its failure in the BEV segment is quite stunning, given that the BEV segment is growing at over 30% per year; VW’s BEV market share has halved between Q2 2024 and Q2 2025 to 1.8%.

With sales also falling 16.2% in Q2 in the US due to the tariff issues, VW managed to grow global sales by 1.2% due to large sales gains in South America (19.8%) where vehicles are locally made, Asia ex-China (10.3%), MENA (14.4%) and Central and Eastern Europe (9.1%). Western European sales were flat, although BEV sales soared in Europe, helped by Tesla’s implosion and the anti-China BEV tariffs there. Only 11% of VW’s global sales are BEVs; with 76% of those in Europe.

The increasingly packed Chinese luxury car segment, with one Chinese brand after another entering, will intensify the nightmare of the German luxury car providers. Aito (a collaboration of Huawei and Seres) has brought out new and updated models that “absolutely destroy” the German luxury brands, as it becomes the #1 high end luxury (RMB 500,000 and above) brand in China with sales tripling in the three years to 2024; with vehicles such as the M9.

But even Aito is now struggling to grow sales appreciably as the other Chinese luxury brands (Li Auto, BYD Denza and Yangwang, Geely Zeekr and Lynk & Co., GAC Aion, Xpeng, Nio, Changan Deepal etc.) respond aggressively. Its response is its fourth EREV SUV model to add to the M5, M7 and M9, the Aito M8 EREV SUV, priced at RMB 359,800 (US$49,880), and which gained an astonishing 80,000 orders only a month after being available; it is the same price as the much smaller and less luxurious BMW X3. It sits between the Li Auto L8 and L9 and competes with the Deepal S09 with respect to Chinese brands. It is the equivalent of an ICE BMW X7 (starts at RMB 1.04 million), the Mercedes ICE GLE (RMB 699,800) Audi ICE Q7 (RMB 609,800) and even challenges the Mercedes ICE GLS (RMB 1.06 million). The M8 can accelerate from 0-100km/h in 4.9 seconds, pretty much the same as an BMW X7 xDrive40i. A pure BEV version of the M8 will be released in August.

Will Chinese consumers really pay three times the price for a lesser-equipped ICE only car just because it has a German badge? The German luxury brands have already been discounting quite massively and still cannot halt their sales decline; these new models and prices from the Chinese brands will just make things worse. For example, there is the Geely Lynk & Co. 900 large 6 seat luxury SUV EREV starting at RMB 289,900 (US$39,780) with a limited time discount. The highest level trim costs RMB 396,900 (US$54,460) and provides a combined range of 1,443km (electric only of 268km) and a 0-100km/h time of 4.3 seconds and a very fully equipped ADAS. Undercutting the Chinese brand competitors, let alone the German luxury brands. It has received over 30,000 orders since it debuted in March.

The luxury SUV space will only get worse with the launch of Li Auto’s first BEV, the six seater Li i8, on July 29th. Then the Zeekr 9X flagship PHEV SUV will start pre-sales in August; a six seat beast with 0-100km/h in 3.1 seconds and a combined driving range of over 1,000km (including 380km of battery-only range). Expect them to be just as competitively priced with respect to the German brands as the other Li Auto and Zeekr models. Then there is also the Nio Onvo L90, a 6 and 7 seater BEV SUV, that started pre-sales on July 10th. Although from the “cheaper” Nio Onvo brand, it is extremely well equipped and relatively luxurious, with a range of between 570km and 605km depending on the model. The price for the base model of RMB 279,900 (US$39,000), with battery swap service RMB 193,900 (US$27,000), will help ratchet up the price competition in this space. The price may even fall further with the official launch at the end of the month, putting a lot of pressure on Li Auto and Zeekr with respect to the pricing for the i8 and 9X; as well as the other Chinese providers of full-sized BEV and PHEV SUVs such as Aito (HIMA-Seres), BYD, Galaxy (Geely), Lynk & Co. (Geely), and Denza (BYD). Making the nightmare for the German luxury manufacturers, Toyota-Lexus, and Hyundai-Genesis even worse.

For the same price as a BMW 7-series sedan one can buy a Huawei Maextro EREV in China, a car two levels of luxury above the 7-series (the reviewer puts the luxury level of the 7-series only at the Avatr 12 level). It received a phenomenal, for such an expensive vehicle, 3,600 orders in the first week of availability.

This is in addition to the Nio ET9 that after only 1 month on the market was outselling the BMW 7 series and the Audi A8.

Mercedes’ Chinese sales fell 8% between and Q1 and Q2 2025 to 140,400, and were down 19% y-o-y. In the month of June sales were down 9.75% to 48,336, a drop of 28% relative to the overall market; even after somewhat of a sales recovery between May and June. The Chinese market was the epicentre of a general fall in Asian sales of 5% quarter over quarter and 16% y-o-y. With sales flat in Europe y-o-y, and down 14% in North America, Mercedes’ global sales were down 9% y-o-y. Sales of BEVs were down even more, at 14% q-o-q and 24% y-o-y, not auguring well for the future. With the ongoing impact of the US car import tariffs and the increasing assault of the Chinese luxury brands, things can only be expected to get worse in the second half of the year.

BMW’s sales were down 13.7% in Q2 in China, leading a drop of 10.1% in Asia as a whole. In June alone, BMW China sales were down 44.23% y-o-y, after a fall of 31.65% between May and June, to just 31,577. In a market growing at 18% per year, that represents a more than half loss in market share between June 2024 and June 2025. Even massive discounting on the ICEV 3-series and 5-series, with the 330i available for as little as the equivalent of only US$27,000, could not stem the sales decline. Sales of BMW’s BEVs and ICE SUVs were down between 20% and 40% in China in Q2. Flat sales in the Americas and a 10% jump in Europe kept the global sales fall to 2.6% (excluding the Mini brand). In spite of BMW’s flat sales in the US in Q2, its BEV sales fell 21.2%; mirroring the BMW issue with BEVs in China.

Audi’s Chinese sales were down 7.8% in June, after a big jump between May and June. They were down a much bigger 19% in Q2 in North America, and European sales were down slightly y-o-y. Porsche’s Q1 China sales fell over 42% to only 9,500, but recovered somewhat to 11,800 in the seasonally better Q2 for an overall 28% fall for the first half of the year. With such low sales numbers, which may very well fall significantly further with the introduction of the Xiaomi YU7 and other competitors, at what point does Porsche start thinking about exiting China? The company’s Chinese sales peaked at 95,671 in 2021 and had already fallen to 56,887 in 2024 (down 28% from 2023); this year they may be lucky to break 40,000 and be at the level last seen in 2013. Porsche’s sales in Germany crashed 23% y-o-y, and in Europe outside Germany by 8%. The global H1 2025 sales decline was only kept to 6% by a 10% jump in North American and rest of the world sales. But that North American jump in sales may be under severe challenge now from the impacts of the US car import tariffs; all Porsches sold in the US are imported from Germany.

Lexus stabilized its China sales from 2022 to 2024, and is the one foreign luxury manufacturer showing some sales strength in 2025. It is also building a Lexus-only manufacturing plant in Shanghai, with production expected to begin in 2027. Looks like Lexus is in it for the long haul, but the Chinese competition will just continue to get tougher and tougher.

If it wasn’t bad enough for the German luxury car brands, the Chinese government has lowered the threshold for its 10% luxury car tax from RMB 1.3 million (US$180,000) to RMB 900,000 (US$125,000) and has extended it to vehicles of all types; including EVs. Of cars sold in China with a price above RMB 900,000 in the first half of 2025, 16,000 (48%) were from Mercedes, 8,500 were from Land Rover (23%), 6,800 from Porsche (18%), 3,000 from Lexus (8%) and 1,100 from Bentley (3%). Such small numbers are evidence that the foreign luxury brands are having to heavily discount even their high end models to make sales. The surfeit of Chinese brand new luxury models tend to fall below the RMB 900,000 price level, with only vehicles such as the higher end versions of the Maextro being above it. This change will provide the Chinese luxury models with an additional competitive advantage.

As TP Huang notes, the average selling price for the German brands has been falling over time and in May 2025 stood at only RMB 370,000 (US$51,300) for Mercedes, RMB 303,000 (US$42,000) for BMW and RMB 268,000 (US$37,170) for Audi; Toyota Lexus fell below RMB 300,000. This is also affecting the Chinese luxury brands, but theirs is more of an intentional strategy to undermine the price/functionality offerings of the foreign competitors while also destroying the foreign brands’ profitability. A battle they can win with their advantages in cost efficiency and technology, but there will be casualties, with both Nio and Li Auto struggling to grow sales; with Li reducing Q2 sales guidance late in the quarter.

Things can only get worse for Porsche specifically, but also for all of the mid-level German SUVs, after the late June launch of the Xiaomi YU7 sport-luxury BEV SUV. With more extensive features and luxury, and better technology, at a significantly lower price. If the SU7 was a nightmare for the German mid-level sedans, including the performance versions, the YU7 is a nightmare for the mid-level SUVs such as the BMW X3, iX3, Porsche Macan, Audi Q3 and Mercedes GLE; and even the slightly larger German SUVs together with the Lexus RX.

The Xiaomi SU7 SUV BEV is bigger than the Tesla Model Y, has a longer range, is more luxurious, has a higher level of equipment, charges faster and accelerates faster. And it is also cheaper than a Model Y:

• Standard SU7 starts at RMB 253,500 (US$35,160) compared to RMB 263,500 for a Model Y standard rear wheel drive.

• Pro SU7 starts at RMB 279,900 (US$38,821) compared to the RMB 313,500 for the Model Y long range all wheel drive.

• Max SU7 starts at RMB 329,900 (US$45,766) compared to the RMB 354,900 for the Model Y performance.

The all-electric Porsche Macan starts at RMB 728,000 for the base model and RMB 968,000 for the turbo version, in the same range as the BMW and Mercedes mid-sized SUVs. With Porsche and the other German brands no longer seen as “premium” with respect to the Chinese brands, their mid-sized SUVs are colossally overpriced when compared to the YU7. Xiaomi’s stated aim is for the YU7 to outsell the Model Y, which had sales of about 90,000 in Q2 2025 alone, and the only limiting factor may be the ability to ramp up production quickly. The company did manage to ramp up SU7 production from 7,058 in the April (for the YU7 the equivalent of July 2025) when deliveries started, to 13,500 in September (December 2025 for YU7) and nearly 26,000 in December (March 2026 for the YU7). So, with some learnings from the SU7 production ramp up, perhaps Xiaomi will be selling the YU7 at a rate of 90,000 in the first quarter of 2026. The YU7 got 200,000 orders in the first three minutes of availability. Xiaomi plans to release an EREV SUV in 2026 and then start selling cars abroad in 2027, which may become a very difficult year for the German luxury car makers (BMW, Mercedes, Porsche and Audi) in their core market of Europe, together with the rest of Asia.

Traditionally, Tesla’s sales in China are the lowest by far in the first quarter of the year due to the Chinese New Year holiday celebrations. But this year Tesla’s Q2 sales were down 4% when compared to Q1, with Model 3 sales now seemingly in terminal decline (outsold by the SU7 by a factor of two) as they fell from 53,000 in Q1 to just 39,000 in Q2. The very thoroughly updated Xpeng P7 mid to large sized BEV sedan will add yet more competition for the Model 3, when it is launched in August. The modest 10% Model Y sales uptick, from 82,000 in the seasonally-slow Q1 to 90,000 in Q2, may very well be the swan song before a secular sales decline sets in. With competitors such as the YU7, we may even see lower Tesla sales overall in the traditionally biggest selling periods of Q3 and Q4; with so many new competitive models with different combinations of better specifications, lower pricing, and better styling. Such as the Avatr 06 sports sedan BEV/EREV from Huawei and Changan, officially launched in April with a starting price of RMB 209,900 (US$28,750).

Also launched in April, the Geely Zeekr 007 GT shooting brake/wagon BEV starting at RMB 202,900 (US$27,740). 2.9 seconds 0-100 km/h for the four wheel drive version with a very luxurious interior.

Here, the battery charging rate of the Geely 800V platform (used in Geely, Galaxy, Zeekr and Lynk & Co.) is shown to be significantly faster than the slower Tesla 400V platform used in both the Model 3 and Model Y. The 800V platforms are rapidly becoming standard in China.

And the BYD Han L BEV/PHEV sedan starting at RMB 219,800 (US$29,910) and the Tang L BEV/PHEV SUV starting at RMB 239,800 (US$32,630). Both with 1,000 volt platforms, and the DiPilot 300 ADAS. The PHEV versions are also a nightmare for the competing German and Japanese ICEV and hybrid models (e.g. Camry, Passat, Highlander, Touareg).

The Xpeng Mona M03 has been nearly outselling the Tesla Model 3 and the Max high-end version has now been released, with only slightly less range than the Model 3, and a second slower 0-100km/h, combined with better advanced drive assistance (ADAS) at only two thirds of the price.

Then the Chery Exceed Elantrix BEV sedan, that in its most expensive model has greater range, faster acceleration and a much better sensor-equipped ADAS than the Model 3 at RMB 50,000 less.

Then there is the new Xpeng G7 that competes directly with the Model Y long range AWD while starting at RMB 195,800 (US$27,320), with the price dropping RMB 40,000 between the June 11th pre-sale event and the July 3rd full launch; underlining the recent intensification of the market competition. And a very large 26% less than the base Model Y, probably heavily influenced by the Xiaomi YU7 pricing. The G7 received 10,000 orders within 7 minutes of the launch.

Even the planned “stripped down” E41 Model Y priced at 20% less than the current base model would be more expensive than the very fully equipped Xpeng G7! The G7 has three of Xpeng’s in-house Turing ADAS chips that are stated to be three times faster than mainstream ADAS chips, and a new heads up display developed with Huawei and an 800-volt architecture. It is also a bit larger than a Tesla Model Y and its sister model the G6 (which is closer in dimensions to a Model Y and starts at RMB 179,900 with ongoing discounts) , offering greater interior and storage space.

What Tesla in China needs is significant price cuts on the current models, not some cheap stripped down version of the Model Y, but as Tesla China is even now only breaking even such a move would produce large losses in China. Tesla seems to have decided not to release the E41 in Q3, and instead has announced a 3-row longer version of the Model Y for launch in the Autumn. As this “Model Y L” will be in the incredibly competitive segment that contains such SUVs as the new Onvo L90 BEV, the BYD Tang L BEV, Aito M9 BEV, and the soon to be released Aito M8 and Li Auto i8 BEVs, sales expectations should be low. Tesla has also applied for a sales license for a new Model 3 variant with upgraded battery and longer range, another small incremental change.

The launch of the YU7 etc., may have already started to impact Tesla Model Y demand as the delivery times for both the RWD Model Y and the AWD Model Y have now fallen to 1-3 weeks; immediate delivery. With the RWD and AWD versions of the Model 3 also with the same immediate delivery, the Tesla China order book seems to have evaporated. Only the high-end Tesla Model 3 Performance has a long delivery schedule (8-10 weeks).

As part of its drive to regain domestic sales momentum, BYD launched the Fang Cheng Bao Tai 3 BEV SUV, starting at RMB 133,800 (US$18,300), which is an obvious competitor to the best-selling Toyota RAV4 (ICEV/PHEV). The Tai 3 enjoys all of the latest BYD technologies, together with a relatively high-end interior.

Yet more bad news for the foreign brands is the new Galaxy Starshine 8 PHEV mid to large sized sedan. It starts at RMB 125,800 (US$17,540). It comes in seven variants with the top variant costing RMB 155,800 (US$21,600). That variant can do 0-100km/h in 6.49 seconds. It is priced lower than the comparable Chinese PHEV competitor models of BYD Han DM-i, BYD Seal DM-i and Leapmotor C02, and received 10,000 orders within 6 days of its launch. The Starshine 8 is also priced much lower than the Japanese and German competitor models such as the Camry HEV (RMB 179,800; US$24,937), the Passat Pro ICEV (RMB 169,900; US$23,564), and the Passat PHEV (RMB 233,150; US$32,337). Those prices, which are already far below those offered to customers in Europe and North America, for example the Passat PHEV starts at Euro 50,000 (US$56,000) in Germany, are now being heavily discounted as the Japanese and German brands desperately fight for their survival in the Chinese market.

The number of new models from the Chinese brands is just too great to cover here, some more are covered in my regular updates on Notes. The competition in the Chinese market is so intense that BYD is struggling to maintain market share and Li Auto recently cut its 2025 sales forecast from 700,000 to 640,000 (and later cut its Q2 sales forecast late in June) as the luxury SUV market becomes saturated with competitive models. Even Geely seems to have stalled somewhat after its recent sales successes.

With respect to sales outside China, BYD sold 79,086, 89,047 and 90,049 vehicles respectively in April, May and June; 258,182 (up abut 150%). Chery’s were 88,000, 109,000 and 106,330; 303,330 (up about 10%). Geely Automobile (excludes Volvo etc.) exported only 30,000, 30,000 and 40,000; 100,000 (down about 8% y-o-y). Geely-Volvo sales were 58,881, 60,000 and 62,858 respectively; 181,739 (down 12%). In the first six months of the year, SAIC sold 494,000 vehicles abroad, a y-o-y increase of only 1.3% (SAIC was the most heavily impacted by the EU anti-China EV tariffs). In June, there were 592,000 vehicles exported from China, which was a y-o-y increase of 22.2% and about 7 million on a yearly basis. Of those exports, 205,000 were EVs; a 140% y-o-y increase.

BYD is struggling to maintain market share in China, while rapidly increasing exports to maintain sales. BYD’s sales do seem to have recovered markedly, driven by the price cuts, in June according to the CPCA. However, the CPCA sales number seems suspect when compared to BYD’s June stated sales and exports. There may be a mismatch if BYD is stating “sales to dealers” and the CPCA is stating “sales by dealers”, and the BYD dealers offloaded a lot of inventory in June; I will be looking into this. But even with this jump in June, BYD’s EV market share only increased back to the average of 2024. In April and May its market share had fallen to 29.7% and 28.5% respectively.

Geely had early success in 2025, but it now seems to be stalling while struggling with its exports and its Geely-Volvo subsidiary; its domestic EV market share fell was 13.1%, 12.7% and 10.3% in April, May and June respectively. Mirroring the fall of its share in the overall Chinese car market. Chery had been making gains in the EV market, from 4% to 4.4% in May, but then fell back to 3.6% in June; while it maintains its overall car market share and y-o-y increase in exports. For SAIC, the SGMW success in growing EV sales is also waning while its exports stabilize after the EU tariff attack on the company. Sales of its own, and its JV partners (GM and VW) ICE vehicles have allowed SAIC’s overall sales to stay just ahead of the growth in the overall market.

Changan is one of the few real success stories with its own brand sales, gaining market share in both EVs (6.7% to 6.9% April to June) and the overall market (6% to 6.2%) in Q2. Leap Motor has also shown success within the EV space in Q2, increasing its market share from 3.1% to 4%, as has Huawei with its HIMA joint-venture vehicles (mainly the Seres Aito brand) increasing EV share from 3% in April to 4.7% in June. HIMA is now working with SAIC on another brand, Shangjie, a mid-sized SUV with a possible price range of RMB 150,000-250,000 (20,700-34,500 USD); set for launch in the Autumn. This will be the most affordable of HIMA’s brand.

Xiaomi was production limited in Q2, but as its second factory starts to ramp up production of a YU7 which has over 250,000 orders there will be a significant increase in the company’s sales in Q3 and beyond (with Xiaomi planning to launch a flagship SU9 EREV SUV, most probably in early 2026). With both Huawei and Xiaomi pouring resources into new brands and new models, the Chinese car market promises to become more competitive not less.

The smaller vendors such as Xpeng, Nio and Li Auto are all struggling to gain traction in their sales growth. Each new vehicle may provide a short-term lift, such as the Xpeng Mona M03, but the momentum quite quickly stalls. Such is the incredible dynamism and competitiveness of an Chinese EV market still growing at 30% annually, which is part of a Chinese car market growing at 18%. No manufacturer can rest on its laurels, and simply to maintain sales is to lose market share; most especially within the EV market segment.

With respect to the foreign brands, excluding Tesla, they still do not have a top-20 selling electric vehicle in China. Even in the PHEV/EREV sub-category there is only one foreign brand vehicle, and at only #19, which is the Buick GLS MPV that had a lower priced (RMB 249,00 / US$34,380, produced by SAIC-GM) version released in April of this year. You can see from the number of new models below, and the large sales falls for many of the other models, how brutally competitive the Chinese market is - even in the PHEV/EREV segment. No matter how successful the foreign brands are in the ICEV segment, that segment’s share of the Chinese car market is falling by at least 2% per quarter (already at 53%); a rate that will quite possibly accelerate as time goes on. The foreign brands are on their way to extinction in China unless they manage to gain success in the BEV and PHEV/EREV sales rankings.

ThinkerCar on Twitter

Some Western commentators have repeatedly called for a consolidation through merger of the Chinese market to reduce “destructive competition” but that is Western oligarch oligopolistic thinking. The Chinese vehicle market is so large that it can support a myriad of large, medium and small players that can keep it highly competitive; driving both new technology uptake and consumer value. The Party-state understands that this is good for China, driving the Chinese vehicle manufacturers to far exceed their foreign competitors through a brutal domestic competition. There will not be just one champion, such as a BYD, but many that will keep each other driving forward rather than resting on their laurels. And these players will then increasingly push abroad against much weaker competition that is used to oligopoly, corruption and collusion; pulling other manufacturing sectors such as batteries, electronic components, electric motors, embedded software, and chip manufacturing with them.

Japan & South Korea

Japanese new vehicle sales in April grew 10.5% to 342,900, with domestic brands having 96% of the market. In May sales grew 3.7% to 324,064 with Nissan being the biggest loser with a 11% y-o-y sales fall. In June sales were up 5% to 393,160.

South Korean sales in April grew by 8.1% to 128,639, and were flat y-o-y in May, at 141,430. Foreign car makers have a 20% share of the market, growing sales at about 15% y-o-y. The Chinese car makers are only just starting to enter the South Korean market. Tesla is pushing hard in South Korea, utilizing one of the last growth markets that it has to aid its global sales numbers. In Q2 Tesla sold 14,394 vehicles in the country, against only 4,818 in Q1 and 11,178 a year ago.

Australia

In June, car sales were up 6.2% to 127,437 and EVs gained a 15.2% market share. BYD was the biggest winner with sales up 368% to 8,156 - placing it at #5; driven by sales of its very successful new and well-priced Shark 6 PHEV Ute which was the fifth best selling vehicle in Australia. Toyota was still #1 but with sales falling 3.2% to 20,225, then Ford up 6.4% to 10,103 (all exported from China), Mazda sown 0.8% to 9,405, Hyundai up 28.3% at 8,407, then BYD, then Kia down 5% at 7,810, Great Wall Motors came in at #7 with sales up 30.9% to 5,464, then Mitsubishi down 30.9% to 5,336, Isuzu up 15.9% to 5,152, Subaru up 3.4% to 4,610. Followed by Tesla down only 2% to 4,589 (all exported from China). SAIC-MG was at #12 and Chery at #13 with 3,024 sales.

BYD (#5), Great Wall Motors (#7) and Chery (#13) are making significant gains at the expense of the Japanese car makers, most especially Mitsubishi, while SAIC-MG (#12) is struggling. We can expect the Chinese brand export drive to intensify, with the pressure on the Japanese manufacturers and Tesla increasing.

Rest of Asia

Thailand

In June, BYD took second place in the sales tables with 6,876 sales; still well behind a Toyota though that had 19,539 sales. Honda was pushed into #3 with 6,209, and Isuzu #4 with 5,139, then Mistubishi with 2,407, SAIC-MG with 2,256, Ford with 1,765, Great Wall Motors 1,114, GAC with 1,073, BMW with 1,051, Suzuki with 989, and Tesla with 825. The Japanese manufacturers are slowly but surely being squeezed out of Thailand.

Malaysia

In June car sales were down about 7% to 58,046; Perudoa 22,328, Geely-Proton 10,638, Toyota 9,946, Honda 4,495, Chery 2,763, BYD 1,045, Mitsubishi 888, Mercedes 733, BMW 620, Tesla 587. Perudoa is owned by Malaysian interests and Daihatsu (part of Toyota) and builds and sells Daihatsu-based models. Geely-Proton is maintaining market share, while BYD and Chery are growing.

Indonesia

In June car sales dropped 12.2% y-o-y to 61,617; Toyota 19,824, Daihatsu 10,001, Mitsubishi 7,626, Honda 5,238, Suzuki 4,570, BYD 3,300, Isuzu 2,196, Chery 2,173. Sales for all of the Japanese brands by double digits, while Chery grew sales by over 100% and BYD was not in the market a year ago.

Africa

I added Africa because this is another car market that has been dominated by Japanese, South Korean and European brands but is now one where the Chinese brands are rapidly expanding their presence. As stated in the video below, Chinese brands increased their exports to Africa by 67% in the first quarter of this year. In 2024, just over a million new vehicles were sold in Africa (775,600 personal and 278,000 commercial); half of which were in South Africa. Followed by Morocco at 176,401 and Egypt at 98,862. The Nigerian market is about 13,500 per year, previously dominated by Toyota, other Japanese brands and Kia.

In Q1 the Nigerian market fell by 22.3% y-o-y, while SAIC-MG actually grew sales by 74.5% and gained the #4 sales spot. Toyota outperformed the market by falling only 13.7% and remained #1. Innoson Motors, that makes locally produced vehicles based upon mostly Chinese designs, together with trikes, saw sales fall only 10.5% and gained the #2 spot. Hyundai sales tracked the overall drop in sales, and it dropped to the #3 position. VW dominates in EV sales, but they may change rapidly with the introduction of Chinese EV models. BYD entered the Nigerian market in April of this year, and Chery and Geely are also present in the Nigerian market. A trend happening all across Africa.

South Africa

Sales were 47,294 in June, an increase of 18.7% y-o-y. The market was dominated by Toyota (11,690), Suzuki (5,221), VW (4,973), Ford (3,058), and Hyundai (2,905). The Chines brands of Great Wall Motor/Haval (2,288) and Chery (2,101) followed at #6 and #7. BYD is expanding its presence, looking to triple its dealership network by 2026. Geely will also be entering the market in 2025, and Changan has already done so this year. So the Chinese onslaught will intensify within the South African market as 2025 progresses.

Morocco

Sales increased by 34.1% y-o-y to 23,298 in June; dominated by Dacia (5,613), Renault (4,322), Hyundai (1,623), Peugeot (1,494) and VW (1,368). BYD was at #13 with only 412 sales but with a sales growth of 3,645.5%! Changan at #18 with sales growing 85%, and Geely at #19 with sales growing 116%. Chery and Great Wall Motor have recently entered the market.