BYD Hits Two-Year Low: China’s EV Slowdown Accelerates

The wheels are coming off China's electric vehicle juggernaut.

BYD—the Shenzhen-based giant that briefly dethroned Tesla—just posted its weakest sales figures in 24 months. The numbers don't lie: the world's largest EV market is hitting a speed bump, and it's rattling supply chains from lithium mines to showroom floors.

Growth Hits a Red Light

Remember when every analyst's deck had 'Chinese EV dominance' as a sure bet? The narrative's shifting. Subsidy sunsets, consumer spending fatigue, and brutal price wars are squeezing margins thinner than a battery cell. Companies that raced to scale now face a new reality—selling cars isn't the same as selling growth stories to investors.

The Ripple Effect

This slowdown isn't contained. It pressures raw material suppliers, strains local governments banking on EV industrial parks, and forces a strategic rethink for global automakers still playing catch-up. The 'inevitable' transition suddenly looks… negotiable.

What's Next for the EV Race?

Innovation or consolidation? The sector needs a second wind—breakthroughs in solid-state batteries, smarter software, or export markets cracking open. Otherwise, we're looking at a shakeout where only the truly efficient survive. The easy money's gone; now comes the hard part.

Another 'can't-miss' sector learning that gravity applies to hype, too. Maybe pour one out for the hedge funds that went all-in on the EV ETF at the peak.

Analysts spark concerns about the decline in automotive sales

In a statement, Helen Liu, a partner at Bain & Company, noted that “We see growing pressure on China’s auto market in 2026 due to a mix of policy changes and competition.” She also stated that “new policies might lead consumers to postpone buying cars while automakers may become more careful about launching new models.”

Reports indicated that January and February might show unpredictable economic data trends because the Lunar New Year holiday falls on a variable, agriculture-based calendar.

Apart from this finding, reports mentioned that EV buyers faced a major, unexpected drop in government subsidies this January. To support this claim, China released a statement on January 1, confirming the reintroduction of a 5% purchase tax on new energy vehicles, ending over a decade of full exemptions from the standard 10% levy. New energy vehicles (NEVs) encompass both battery-electric and hybrid models.

This announcement sparked tension in the automotive mobility ecosystem. In an attempt to calm these fears, Tu Le, founder and managing director of consulting firm Sino Auto Insights, weighed in on the situation. He stressed that they are aware EV sales will decline, but do not know to what extent, arguing that individuals should regain their composure as they await more clarity after the end of the first quarter.

Meanwhile, in response to this decline in sales, the Beijing government has adopted various measures to support its electric car industry. For example, it rolled out diverse, supportive policies and financial aid programs.

Regarding China’s sales report, sources noted that more than 50% of new passenger cars sold were new-energy vehicles by the summer of 2024. In 2025, BYD surpassed its US rival Tesla to solidify its position as a leader in battery-powered electric vehicle sales. At this time, the Shenzhen-based firm sold a total of  2.26 million units, reflecting an increase of 28% from the previous year.

Nonetheless, despite these impressive sales results, BYD sold only 83,249 battery-electric passenger cars out of the 205,518 vehicles available in January, marking their lowest monthly sales figure since February 2024, when they set a record of 121,748 car sales.

Automobile makers rush to boost their car features

BYD faces stiff local competition amid a price war that has forced automakers to cut prices while boosting features. For instance, Aito, a prominent Chinese premium electric vehicle (NEV) marque that struck a deep partnership with technology giant Huawei, delivered more than 40,000 vehicles in January, an increase of more than 80% compared to the previous year.

Another example is Leapmotor and Nio, which reported surges in deliveries to 32,059 and 27,182, respectively, compared with last year. Similarly, Xiaomi saw car deliveries rise to more than 39,000 in January year on year, ahead of the launch of the updated SU7 sedan in April. However, this was a drop from more than 50,000 deliveries made in December.

“BYD has done exceptionally well at the top, and it’s remarkable how long they’ve managed to stay ahead of their domestic competitors,” Le said, arguing that market competition is fierce among automakers.

The smartest crypto minds already read our newsletter. Want in? Join them.