Price War Batters Chinese Automakers’ Profits
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China’s protracted auto price war is hammering carmakers’ profits and forcing them to pivot to overseas markets in search of growth.
While BYD Co. Ltd. (002594.SZ), the country’s largest electric-vehicle (EV) maker, posted a stellar first quarter, its fortunes reversed in the second quarter. After doubling in the first three months, the company’s net profit dropped by 30% to nearly 6.4 billion yuan ($900 million yuan) in the second quarter as revenue growth slowed to 14%. Its gross profit margin narrowed by 2.4 percentage points to 16.3% in the April-June period, its lowest since the third quarter of 2022.
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- 2022：
- China's auto manufacturing sector had a profit margin of 5.7%.
- Third quarter of 2022：
- BYD previously recorded an even lower gross profit margin.
- Late 2024：
- EU slapped a 35.3% anti-subsidy tariff on SAIC cars.
- First half of 2024：
- GAC recorded a net profit of 1.52 billion yuan.
- As of 2025：
- China's auto price war is in its third year.
- 2025：
- Leapmotor targets 50,000 unit annual exports.
- As of 2025：
- Leapmotor has established over 600 sales and service outlets abroad.
- Since February 2025：
- Policymakers and regulators have pushed for consolidation in the auto industry.
- First quarter of 2025：
- BYD posted a stellar first quarter with net profit doubling from the previous period.
- First five months of 2025：
- Average profit in China’s automotive manufacturing sector fell 11.9%; profit margin dropped to 4.3% from 5.7% in 2022.
- First half of 2025：
- Geely's profit dropped 14% to nearly 9.3 billion yuan, revenue grew 27%, average selling price per vehicle declined 13%, partly due to a government trade-in program.
- First half of 2025：
- SAIC Motor's profit fell 9% to 6 billion yuan.
- First half of 2025：
- GAC's revenue fell 7.9% to 42.1 billion yuan, with a net loss of 2.53 billion yuan, reversing from a net profit in the first half of 2024.
- First half of 2025：
- BYD’s overseas revenue soared 50.49% to 135.36 billion yuan, accounting for 36.46% of its total, up 6.59 percentage points from 2024.
- First half of 2025：
- Geely’s exports fell 7.7% to 184,000 vehicles, while China's total auto exports grew 10.3%.
- First half of 2025：
- SAIC Motor's overseas sales grew 1.27% to 494,000 units, possibly affected by anti-subsidy tariffs imposed in late 2024 by the EU.
- First half of 2025：
- Leapmotor exported over 20,000 units.
- Second quarter of 2025：
- BYD's net profit dropped by 30% to nearly 6.4 billion yuan as revenue growth slowed.
- Second quarter of 2025：
- Nio and XPeng narrowed losses to 4.99 billion yuan and 480 million yuan respectively through affordable models.
- April–June 2025：
- BYD's gross profit margin narrowed to 16.3%, its lowest since the third quarter of 2022.
- 2025 (by half-year report)：
- SAIC's MG marque expanding to Middle East, IM Motors launched in Thailand, UK, and Australia.
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