Automobile manufacturers bid farewell to 2025 amidst fierce competition, and the future competition will be even more brutal.
"I think every car company is walking on eggshells," He Xiaopeng, Chairman and CEO of XPeng Motors, recently told media outlets including China Fund News. He said that the Chinese automotive market is changing too rapidly. It was hard to anticipate the current situation a year ago, and it's also difficult to imagine what it will be like a year from now.
Comparing 2024 with 2025, the competitive landscape of car companies has changed dramatically again. The "top dog" among new car - making forces has shifted from Li Auto to Leapmotor, while BYD, the "top dog" among domestic car companies, is being rapidly caught up with by SAIC Motor, Geely Auto and other car companies.
Behind the change in the competitive landscape of car companies is a significant change in the competitive logic of the domestic automotive market. In 2025, the price war represented by the "limited - time fixed price" intensified in the first half of the year and suddenly stopped in the second half. Subsequently, car companies collectively stated their opposition to "involution" and called for a "value war."
The decline of the purchase tax subsidy for domestic new energy vehicles will become a new factor that makes the competition among car companies even more brutal. Lu Fang, Chairman and Party Committee Secretary of VOYAH, said, "Once we reach this point, fuel - powered vehicles and new energy vehicles will, to some extent, face an ultimate showdown."
Do the "Top Dogs" of Car Companies Take Turns?
The "top dog" in each field will attract attention from all sides, but the throne of the "top dog" among domestic car companies was not stable in 2025.
In the first half of 2025, BYD barely held on to the throne of the "top dog" among domestic car companies. Its operating revenue from the automotive business was only 8.17 billion yuan more than that of SAIC Motor. Previously, SAIC Motor had long held the throne of the "top dog" among domestic car companies, but in 2024, it was overtaken by BYD in terms of revenue, profit, sales volume and market value.
The problem is that BYD has not achieved a stable advantage. In the second half of 2025, SAIC Motor's sales volume increased year - on - year and month - on - month for several months, while BYD's sales volume decreased year - on - year and month - on - month for several months, failing to replicate its previous high - speed growth trend.
Domestic sales are the foundation of BYD's overall sales volume, but its monthly sales volume from July to November 2025 decreased by 15.63%, 14.29%, 15.89%, 24.11% and 26.81% respectively year - on - year.
Wang Chuanfu, Chairman and CEO of BYD, recently said that since 2025, BYD's sales decline in the domestic market is mainly because its current technological lead is not as significant as in previous years, the market - stunning effect of its technological achievements has declined, and the homogenization characteristics of the industry are becoming more obvious.
In the field of new car - making forces, Leapmotor has become the new "top dog," leading in delivery volume for nine consecutive months.
Looking back at 2024, Li Auto was the "top dog" among new car - making forces, being the envy of the outside world in terms of sales volume, profit and other aspects. In 2025, Li Auto accelerated its transformation to the pure - electric technology route, but the results were not ideal. Its delivery volume has decreased year - on - year and month - on - month for several months.
Li Xiang, Chairman of Li Auto, said that the cumulative orders for the two pure - electric SUVs, Li i6 and Li i8, have exceeded 100,000. To solve the problem of production capacity ramping up on the supply side, the battery supply for the Li i6 has officially adopted the "dual - supplier" model, and it is expected that the monthly production capacity will steadily increase to 20,000 at the beginning of 2026.
Since 2015, the "top dog" among new car - making forces has changed several times. Zhu Jiangming, Chairman and CEO of Leapmotor, said that it is normal to lead for a while. NIO, XPeng, Li Auto, Nezha and WM Motor have all been the "top dog" among new car - making forces.
Industry insiders analyzed that the domestic automotive industry is in a critical period of transformation to new energy and intelligence. The fierce competition among new energy vehicle companies is reflected in the "fast - moving consumer goods" nature of products. It is difficult for a car company to gain long - term advantages through one or two popular models.
The speed of domestic vehicle model updates has changed from the previous "one model change every three years and one generation change every five years" to the current "one model change every six months and one generation change every year." A car company employee described this as "year - disposable electric vehicles."
Li Bin, Chairman and CEO of NIO, said that continuously producing popular models is probably the dream of every car company CEO. However, for a model to become popular, in addition to product competitiveness, the overall system capabilities of the car company also need to keep up.
"Anti - Involution" Prompts Car Companies to Accelerate Change
The intensifying competition in the domestic automotive market was reflected in the more brutal price war in the first half of 2025.
For example, from March to June, BYD launched three consecutive promotional measures. In May, it launched promotional measures such as "limited - time fixed price" or limited - time subsidies, covering 22 models of the Dynasty and Ocean series.
The China Association of Automobile Manufacturers issued a statement saying that the "involution - style" competition mainly manifested in the disorderly price war is an important factor in the decline of industry efficiency. It called on all enterprises to strictly abide by the principle of fair competition and conduct business activities in accordance with laws and regulations.
Since the second half of 2025, the domestic automotive industry has set off an "anti - involution" trend. Lu Fang said that "anti - involution" is a necessary choice for enterprise operation, which is related to whether an enterprise can continuously provide high - quality services to users.
VOYAH submitted its prospectus to the Hong Kong Stock Exchange in early October, showing the outside world that it is one of the five new energy vehicle companies with quarterly profits. Lu Fang said, "It's not healthy to rely on continuous capital infusion without profit. VOYAH has requirements for the gross profit and profitability of all its products."
Different from the previous focus on the price war among car companies, the "anti - involution" in the domestic automotive industry in 2025 began to pay attention to problems such as the overly long payment terms for suppliers.
Public information shows that in 2024, the payment terms for suppliers of many domestic car companies exceeded 120 days, and those of some car companies exceeded 200 days, while Tesla claims to have a payment term of about 90 days.
In mid - June, 17 key car companies, including FAW, Dongfeng, GAC and SERES, publicly promised that the payment terms for suppliers would not exceed 60 days.
Gu Hongdi, Vice Chairman and Co - President of XPeng Motors, said that car companies need a healthy competitive environment, and "anti - involution" is conducive to the healthy development of the automotive industry.
"The biggest reason for the 'involution' of car companies is the serious homogenization of products," said Zhang Xiong, General Manager of the Product Department of GAC Group. He said that many car companies still adopt the development thinking of "function - oriented," but in the era of electrification and intelligence, users' demand for cars has expanded to emotional value.
Different from many car companies advocating "competing in technology," "competing in management" and "competing in value," GAC Group has started to "compete in the ecosystem." In addition to strengthening cooperation with Huawei, it has also joined hands with JD.com and CATL to launch the AION UT super.
"Ecosystem cooperation is a necessary choice to meet customer and market needs and deal with competition," said Ge Xianqing, General Manager of GAC Group. He said that the iteration speed of automotive technology is too fast, and only by conducting ecosystem cooperation with the top players in the industry can we keep up with the times.
Different from previous supplier cooperation, Ge Xianqing believes that in - depth co - creation is the core of ecosystem cooperation. The cooperation between GAC Group and Huawei includes co - creation in technology and demand scenarios, as well as full - link cooperation from product definition, market insight to R & D, from delivery, service to marketing.
Competition in the Final Stage Is More Brutal
"The only thing that is certain is that the competition will be more brutal and bloody," He Xiaopeng made a judgment on the Chinese automotive market in 2026 based on the rapid changes in the domestic automotive industry.
Since January 1, 2026, the purchase tax for new energy vehicles in China has been halved. Before that, a policy of full exemption from purchase tax had been implemented for 10 years, which helped the rapid development of the new energy vehicle industry in China.
The leaders of many car companies said in interviews that in terms of penetration rate, the new energy vehicle industry in China has achieved rapid growth. The decline of the purchase tax subsidy will promote the development logic of the industry to shift from "policy - driven blood transfusion" to "market - driven self - hematopoietic."
Data from the China Passenger Car Association shows that in the first 11 months of this year, the penetration rate of new energy vehicles in China reached 47%. Among them, the penetration rate has exceeded 50% for two consecutive months since October 2025, reaching 52.13% and 52.27% respectively.
The industry is concerned about whether the weakening of policy support in 2026 will lead to a rapid rebound in the sales volume of fuel - powered vehicles and form a situation where fuel - powered vehicles and new energy vehicles "divide the world equally."
"In 2026, the competition between fuel - powered vehicles and new energy vehicles may be more intense, but the product strength of new energy vehicles far exceeds that of fuel - powered vehicles," Lu Fang said, adding that the new energy vehicle industry is developing at a faster pace.
Zhu Jiangming believes that in 2026, the market share of new energy vehicles in China will steadily increase by 5% to 10% on the basis of 2025.
Looking at the competitive landscape of car companies, Gui Shengyue, Executive President and Executive Director of Geely Auto, predicted that the Chinese automotive industry will enter a stage of "weeding out the weak" in 2026. Car companies that can emerge victorious must have more stable strategic determination, more profound automotive - making heritage and more correct strategic methods.
"What we need to do is to survive and take it slow," Li Bin said that the competitive landscape of car companies will not be settled in the short term. The domestic new energy vehicle industry entered the "final" stage around 2024. It is expected that it will take about 5 years to see the basic outline and 10 years to enter a stable pattern.
Different from BYD, Geely Auto and Leapmotor, which have already made profits, NIO and XPeng Motors among the new car - making forces are trying to achieve their first quarterly profit in the fourth quarter of 2025.
He Xiaopeng believes that due to the network effect in the Internet industry, it is easy to tell the winners and losers among relevant enterprises. However, the automotive market is larger and more sustainable, affecting a large number of supply - chain and ecosystem enterprises. The competition can be said to be a never - ending marathon.
However, there may be a classification and grading in the "final" stage. He Xiaopeng believes that in the hardware era of the automotive industry, all the first, second and third - tier camps can find enough survival points. But in the era of "hardware + software," some effects of the Internet industry will become more prominent, and the gap between the second - tier and first - tier camps will become larger and larger.
This article is from the WeChat official account "China Fund News" (ID: chinafundnews), author: Qiu Dekun, editor: Zhang Jie. It is published by 36Kr with authorization.