Top 10 Predictions for the Chinese Car Market in 2025
As we look ahead to 2025, here are our top 10 predictions for what may unfold in the Chinese car market:
1. Increasing Bankruptcy
With the ongoing price war and the dominance of BYD in the new energy vehicle (NEV) market, we anticipate that around a third of new start-up companies will go bankrupt. Neta, a prominent name, is at risk of failing in the first half of the year, following the collapse of companies like Jiyue and HiPhi in 2024.
2. Increasing Electrified Vehicle Penetration
We expect the NEV penetration rate to reach between 55% and 60% in 2025. While sales may dip in the early part of the year, they are likely to pick up post-Chinese New Year and accelerate in the second half of the year.
3. SAIC’s Strategic Moves
SAIC, facing challenges in various joint ventures, may explore acquisitions to stay competitive. The company’s reliance on the Wuling joint venture for sales, especially in NEVs, may lead it to consider purchasing a more successful new entrant like Xpeng.
4. State-Owned Enterprise Mergers
Struggling state-owned enterprises like FAW, Dongfeng, BAIC, and GAC may face mergers to consolidate resources and improve performance. A potential merger between FAW and BAIC could be on the horizon.
5. Joint Venture Closures
At least three joint ventures, including those with Hyundai, Jaguar Land Rover, Ford, and General Motors, may cease operations in 2025 due to challenges in adapting to the shift towards NEVs in the Chinese market.
6. Adoption of Chinese EV Technology
One or more joint venture brands may opt to incorporate technologies like the CATL Bedrock skateboard chassis or Huawei’s HarmonyOS and Qiankun ADAS system to enhance their NEV offerings.
7. Lexus’ Expansion in China
Lexus could announce the establishment of a factory in Shanghai to boost production for both domestic and export markets, emulating Tesla’s successful strategy in the region.
8. Sales Growth
Overall car sales in China are projected to reach 30 million in 2025, with BYD leading the market. Xpeng may see significant sales growth, while Nio’s profitability could improve with the introduction of the Nio ET9.
9. Solid-State Battery Innovation
A Chinese brand is expected to introduce a new model featuring an all-solid-state battery toward the end of 2025, potentially unveiling it at major auto shows like the Guangzhou Auto Show.
10. Advancements in Autonomous Driving
Several Chinese companies are likely to announce advanced ADAS systems capable of full smart driving with minimal human interventions by the end of 2025, marking a significant step towards autonomous driving in the market.
Disclaimer
These predictions are based on industry expertise and should not be construed as investment advice. We do not have insider information on the companies mentioned.
