If 2024 was the year that saw traditional foreign automakers exit the Chinese auto market, 2025 appears to be the year in which some domestic EV companies can consolidate their leadership. “In China, (new energy vehicle) leaders such as BYD are likely to further strengthen their market position, while foreign brands fade away,” Nomura Bank said in its 2025 Global Automotive Outlook published on December 4. They pointed out how BYD has already captured 16 positions. % of the entire Chinese car market as of October this year – up from 12% in 2023. That's according to year-to-date unit sales. The Hong Kong-traded automaker is Nomura's top pick for the Chinese auto market. Analysts rate BYD a buy, with a target price of HK$375 ($48.20), up just over 3% from Friday's close. BYD's third-quarter revenue surpassed Tesla's for the first time on a quarterly basis. In 2023, the Chinese automaker produced more cars than Elon Musk's automaker for the second year in a row. Tesla still makes more battery-powered cars than BYD, whose hybrids account for at least half of sales. But the American electric car company sells in a much higher price range than most BYD models. Tesla sales in China fell 4.3% in November from a year ago, while BYD saw a 67% increase, according to CNBC's calculations of China Passenger Car Association data. BYD is far ahead of its competitors, with the second-largest player by Chinese market share, Geely, having just 8%, according to Nomura. HSBC analysts in late November raised their target price on Hong Kong-traded Geely Automobile stock to HK$19.30, about 31% higher than the stock's closing price on Friday. The company rates the stock a buy. “We believe the company is on track to exceed its full-year target of 2 million units, with EV penetration likely to reach 40%, supported by the strong performance of newly launched models,” HSBC analysts said. They expect Geely sales to grow by 22% next year to 2.6 million units. Geely owns US-listed electric car company Zeekr and other car brands, including Swedish brand Volvo, which the Chinese company acquired from Ford in 2010. Other traditional automakers, both domestic and foreign, in China are struggling with the shift The world's largest automobile market is rapidly growing for battery-only and hybrid vehicles. General Motors announced last week that it expects to incur billions of dollars in costs while restructuring its joint venture with SAIC Motor Corp. in China. The changes include plans to close factories. SAIC GM Wuling, GM's local joint venture, accounted for 3% of China's auto market for the year as of October, according to Nomura. The data showed that the company owns 6% of the new energy vehicle sector. Chinese electric vehicle startups still represent only a small portion of the domestic market compared to leaders BYD and Geely. One company Citi analysts classify as Hong Kong-listed Yongda, which operates stores for several new energy vehicle brands in China, including Huawei's Aito. While the Chinese smartphone and telecom giant has maintained that it does not make cars, Huawei has partnered with traditional automakers to sell battery-only and hybrid-powered vehicles that include in-car entertainment, driver-assistance technology and other software. Citi analysts said that according to talks with Yongda management on Dec. 4, sales of cars powered by Huawei's automotive system could reach 1 million units next year, higher than the internal unit sales forecast of 700,000 units. Yongda expects Huawei's total authorized stores to exceed 20 by early next year, up from 8 currently, according to Citi. The company has a price target of HK$2.98 at Yongda, up about 47% from Friday's close. Yongda also operates electric vehicle stores for Xiaomi and Xpeng, according to Citi. Among publicly traded Chinese electric vehicle startups, Citi analysts gave buy ratings to Nio and Leapmotor, but not Xpeng or Li Auto, both of which received a neutral rating. Citi said in a report issued late last November that Lip Motor, listed in Hong Kong, spends more efficiently on research and development than its counterparts, by about 7,400 yuan ($1,017) per car. In contrast, Xpeng spends 25,900 yuan, Nio spends 26,900 yuan, and Li Auto spends 21,000 yuan, according to Citi. Analysts raised their price target on Leapmotor from HK$44.20 to HK$45.10, nearly 62% higher than Friday's close. Citi expects U.S.-traded Nio shares to roughly double from current levels to $8.90. In a December 3 meeting with Nio, Citi said the company aims to reach breakeven group-wide in 2026 partly by limiting the increase in research and development spending to less than 10% a year, and increasing vehicle deliveries. The company aims to increase sales of its premium Nio brand by 10% to 20% next year, and accelerate sales of its recently launched lower-priced Onvo brand to 20,000 per month in March, the Citi report said. After launching two new SUVs in the second half of next year, the automaker expects Onvo's monthly sales to reach between 30,000 and 50,000 vehicles, Citi said.
Trending
- Ro offers vials of the weight-loss drug Zepbound by working with Eli Lilly
- Demand for mortgage refinancing rose 27%, with interest rates falling for the third week in a row
- Can quantum computing be used in the real world?
- China intensifies Wall Street meetings as Trump's inauguration approaches
- General Motors is exiting the robotaxi market and will bring cruise operations in-house
- Insurance stocks have fallen since the killing of UnitedHealthcare CEO Brian Thompson
- The CPI report is expected to show that progress in inflation has reached a standstill
- Oracle shares are headed for their worst day in 2024 after losing Q2 earnings
Electric vehicle stocks play a role in 2025 as GM and Tesla struggle in China
