In June, 2.08 million passenger cars were sold. The China Passenger Car Association said that the smoke of the price war was gradually dissipating.

"We have seen that the most intense stage of the price war is passing." In an analysis article recently published by the Passenger Car Market Information Joint Committee (CPCA) of the China Automobile Dealers Association, Cui Dongshu, the secretary-general of the CPCA, for the first time clearly expressed his judgment on the current competition situation in the auto market. He pointed out that since April 2025, the wave of price cuts for passenger cars has significantly weakened. Whether in terms of the number of participating models or the actual price cut range, it has released a signal that "the smoke of war is gradually dissipating."

Three years ago, leading automakers represented by Tesla triggered an industry earthquake of "trading price for volume," pushing the price war to the extreme and once plunging the industry into an involution quagmire. Now, with policies stabilizing expectations, enterprises stabilizing their rhythms, and the growing demand for replacement and upgrading among consumers, the market is shifting from being price-driven to value competition.

From the fierce price battle at the beginning of the year to the structural recovery in June, the auto market is quietly changing its trajectory: bidding farewell to "brutal expansion" and moving towards "high-quality competition." Behind the rebound in sales are policy guidance, technological precipitation, brand accumulation, and consumers' reexamination of quality.

The future competition is not limited to the domestic market. Whether Chinese cars can truly gain a foothold overseas, technology will be the ultimate touchstone for this industrial leap. And China's plug-in hybrids may be the key to opening the door to the world market.

The Ebb of the Price War: Fewer Price-Cut Models and Narrower Price Cuts

In the first half of 2025, although some automakers still continued to boost sales through official price cuts or promotions, the overall intensity has significantly slowed down. The official account of the CPCA, "Passenger Car Joint Committee," released data showing that there were only 7 models with price cuts in January, which rebounded to 21 in February, reached a high of 23 in March, and then quickly shrank. There were 14 models with price cuts in April, 12 in May, and it remained at a moderate level of 14 in June, showing a significant decline compared with the same period in 2023.

The types of price-cut models have also tended to diverge. Taking June as an example, there were 6 pure electric vehicles with price cuts, 3 more than the same period last year, but only 5 traditional fuel vehicles with price cuts, 2 fewer than the same period last year; the number of plug-in hybrid models increased slightly, and the number of extended-range models remained basically the same. "This indicates that there are still structural adjustments in new energy vehicles in the fierce market competition, while the price system of fuel vehicles tends to be stable," Cui analyzed.

More importantly, the average price cut range has also narrowed simultaneously. From January to June this year, the average price cut for new energy vehicles was 23,000 yuan, a decrease of 12%; by June, the price cut range dropped to 15,000 yuan, a decrease of only 10.4%. The situation of fuel vehicles was similar. In June, the average price cut was 14,000 yuan, a decrease of 8.6%. The overall average price cut in the market narrowed from 11.4% in the first half of the year to 9.9% in June.

Source: "Analysis of Price Cuts in the Passenger Car Market in June 2025" on Cui Dongshu's official account "Passenger Car Data"

Cui Dongshu believes that the slowdown of the price war is due to two reasons. On the one hand, "new cars are no longer blindly launched at low prices," but instead attract users through adding configurations, optimizing the experience, and "invisible subsidies"; on the other hand, automakers' inventory management has become more refined, and with the boost of the national "scrap and update" subsidy policy, the market supply and demand relationship has become more balanced.

Retail Sales of 2.08 Million Units in June: A Year-on-Year Increase of 18%, and the Effectiveness of the Replacement Policy

Behind the gradual end of the price war is the substantial recovery of market demand. The official account of the CPCA, "Passenger Car Joint Committee," released data showing that in June 2025, the national retail sales of passenger cars reached 2.084 million units, a year-on-year increase of 18.1% and a month-on-month increase of 7.6%, setting a new high in recent years for the same period. From January to June, the cumulative retail sales of passenger cars reached 10.9 million units, a year-on-year increase of 10.8%.

Source: "Analysis of the National Passenger Car Market in June 2025" on the official account of the CPCA, "Passenger Car Joint Committee"

This growth is not accidental. In the first half of 2025, the national "trade-in" policy continued to be implemented, and subsidies were intensively issued across the country, directly activating the replacement willingness of existing car owners. Data from the Ministry of Commerce showed that in June, the number of applications for trade-in subsidies reached 1.23 million units, accounting for nearly 70% of private car buyers.

Structurally, self-owned brands have performed outstandingly by making efforts in both the new energy and export fields. In June, the retail sales of self-owned brands reached 1.34 million units, a year-on-year increase of 30%, and the market share rose to 64.2%, a year-on-year increase of 5.6 percentage points; the penetration rate of new energy retail sales reached 53.3%, continuing to occupy more than half of the market.

In terms of enterprise rankings, BYD continued to lead, with retail sales exceeding 350,000 units in June; Geely, Changan, and Chery followed closely, all achieving double-digit growth; Tesla China, with the strong performance of both the Model Y and Model 3, sold more than 60,000 units in a month, ranking among the top foreign brands.

Overall, the auto market in June showed three major characteristics: First, "the off-season is not off," with retail sales approaching the high in March, and consumer potential accelerating to be released under the promotion of policies; second, "exports and new energy are advancing side by side," with 480,000 units exported in June, a year-on-year increase of 23.8%, and new energy accounting for more than 41%; third, "the concentration of leading enterprises is increasing," with 23 automakers selling more than 10,000 units per month, forming a stable main force.

Chinese Plug-in Hybrids Go Global: From Price Competition to Technological Exports

Beyond sales volume and price, 2025 also reveals a more profound trend: Chinese cars, especially plug-in hybrids, are accelerating their pace to go global.

From an international perspective, although countries such as the United States and the United Kingdom continue to support fuel vehicles on the surface, the global electrification process is irreversible. And plug-in hybrids, with the advantages of "no range anxiety + high energy efficiency + scene compatibility," are becoming a key force in the global new energy market.

Plug-in hybrid models have completed the transformation from an "intermediate state" to the "main force" in recent years. They combine the energy efficiency of electric vehicles and the flexibility of fuel vehicles, solving the problems of range anxiety and charging bottlenecks, and are a "practical solution" in the new energy transformation of various countries. Currently, the market share of Chinese plug-in hybrids accounts for 80% of the global market, and technological systems such as BYD's DM-i, Geely's Raytheon, and Li Auto's extended-range system have taken the lead.

The overseas performance of such products is also rapidly improving. Taking BYD as an example, its DM-i system has been exported to Southeast Asia, the Middle East, Latin America and other regions, and the proportion of plug-in hybrid model exports in the first half of 2025 exceeded 45%. Automakers such as Great Wall, Geely, and Chery have also successively deployed plug-in hybrid production capacity overseas or promoted technological authorization, accelerating their global implementation.

Compared with pure electric vehicles' dependence on charging infrastructure, plug-in hybrids are more suitable for the current road and energy situations in most developing countries. Therefore, they are not just a "temporary product" in the Chinese market but are also expected to play the role of a "definer" in the global new energy market.

Cui Dongshu emphasized: "Chinese automakers are no longer just exporting cheap cars but are exporting high-quality and high-tech full-scenario solutions." Price is no longer the only selling point, and technology, scene adaptability, and brand power are the core of overseas competition.

This article is from the WeChat official account "Financial Auto," author: Liu Ying, editor: Shi Zhiliang, published by 36Kr with authorization.