"The recent wind direction seems a bit off."

A senior executive of an automaker responsible for the Southeast Asian market told Auto Industry Chronicle.

Starting July 1 this year, all electric vehicles imported fully into Malaysia (CBU) must simultaneously meet two new conditions: a minimum landed price of not less than 200,000 Ringgit (approx. 330,000 RMB), and motor power of no less than 180kW.

This does not include the restored import tax, consumption tax, and sales tax.

The reasons provided by the other party are also very sound: first, to protect local automotive brands and create space for their development, and second, to prevent Malaysia from becoming a dumping ground for excess electric vehicle production capacity from other countries.

When the model of relying on price advantages to quickly distribute goods several years ago no longer works, it also means that Chinese brands must readjust their layout thinking: either accelerate localization production or be squeezed out of the market by high tariffs.

From 2022 to 2025, to support the rapid popularization of the electric vehicle industry, Malaysia issued a temporary relaxation policy: for electric vehicles above 100,000 Ringgit, import tax and domestic tax were exempted, only 10% sales tax was levied.

Top 20 Malaysian Electric Vehicle Brand Registrations in 2025

The generous policy dividends also attracted many Chinese brands to enter quickly.

In the top 10 Malaysia Electric Vehicle Sales Rankings for 2025, BYD, Zeekr, Chery, XPeng, and Denza all made the list (Proton ranked 2nd is strategically controlled by Geely).

BYD had held the title of local electric vehicle sales champion for three consecutive years. Taking advantage of the hot sales momentum, in August 2025, BYD announced the landing of a CKD complete vehicle assembly factory at KLK Science Park, Tanjung Malim, Perak, with a planned annual capacity of 50,000 units and an estimated investment of about 1.3 billion Ringgit.

After obtaining the temporary manufacturing permit at the end of September of the same year, the project progress advanced rapidly.

However, an accident occurred.

In March 2026, local media reported that BYD's Tanjung Malim factory construction showed "signs of suspension".

"Government requires BYD factory 80% capacity must be exported" and "Local selling price must not be less than 200,000 Ringgit" once circulated on the internet.

In response, the Malaysian Ministry of Investment, Trade and Industry (MITI) issued a special clarification. The rumor of "80% capacity must be exported" was actually an additional clause limitation:

The annual local sales cap for this factory is 10,000 units, and this quota exactly accounts for 20% of the project's planned total capacity, and the 10,000 unit quota is a production framework jointly agreed upon by multiple parties.

Additionally, the on-road price of locally assembled CKD vehicles must not be less than 100,000 Ringgit, not 200,000.

MITI repeatedly emphasized, the additional clauses were not targeting BYD, but applied to all new automotive investment projects in Malaysia starting from September 2025, except for projects using existing local assembly facilities.

BYD Dolphin Right-Hand Drive Version

But the policy implementation node happened to coincide with BYD's factory construction cycle, inevitably leading to speculation.

After winning the local electric vehicle sales champion for three consecutive years, BYD started factory construction in September 2025, the timing was exactly covered by the new rules. Meanwhile, BYD's popular Dolphin, Atto 2, Seal models locally were priced around 100,000 Ringgit.

In the view of industry insiders, on one hand, they cannot launch models below 100,000 Ringgit, on the other hand, they are constrained by an annual domestic sales cap of 10,000 units, and the additional clauses also require the complete vehicle assembly process to be in local supporting welding workshops, coating workshops, and final assembly workshops, obviously increasing costs. The three major limits force BYD to reconsider the value of this project.

It is not only BYD affected by this.

"The additional clauses came out particularly suddenly. We were supposed to start work on local layout in Malaysia this year, now we are negotiating adjustments again." A senior executive of a central enterprise overseas told Auto Industry Chronicle candidly.

NO.2Were We Targeted?

So, were Chinese brands deliberately targeted?

In fact, behind the additional constraint clauses issued by Malaysia lies a macro consideration based on the domestic industrial chain and employment stability.

Malaysian Minister of Investment, Trade and Industry Zahari Abdul Ghani explained that the relevant clauses treat all countries and brands equally, aiming to drive local assembly production capacity towards sustainable, high-value-added market segments, while avoiding replacement shocks to the existing local supplier ecosystem.

At the same time, the clause is export-oriented as its core, aiming to enable foreign investment to help Malaysia balance trade income and expenditure and deeply integrate into the global supply chain.

Industry insiders pointed out that this does not limit the total factory capacity, but is a strategic policy guiding enterprises to develop with exports as the core.

Malaysia hopes to get rid of the pure "import selling" model and expand the added value of local industries.

Currently, local brands Perodua and Proton have long occupied more than 60% of the mainstream share of the passenger car market. The industrial system supporting hundreds of parts manufacturers provides over 700,000 employment positions and is the cornerstone of stable local industrial development. Introducing advanced Chinese electric vehicle technology and industrial systems helps to quickly improve the development level of the local industrial chain.

As MITI also emphasized, projects using existing local assembly facilities are not subject to the newly issued additional clauses.

NO.3Chinese Brands Have Their Own "Tricks"

The localization layout of Chinese automakers is showing differentiation: some are trying to build independent capacity, while others choose to "borrow a boat to go overseas", embedding into the local industrial chain with lower policy risk through joint ventures or shared local production lines.

Just not far from Tanjung Malim, in Beringin High-Tech Automotive Valley, Selangor State, construction progress has never stopped.

In 2025, Chery adopted a joint venture model with local capital to build a smart automotive industrial park, with the first phase planning an annual capacity of 100,000 units, expandable to 300,000 units, and expected to start production in the second half of 2026.

Chery iCar officially rolls off the production line

Chery is one of the earlier Chinese automakers to obtain formal complete vehicle manufacturing qualifications in Malaysia. Besides the smart automotive industrial park under construction, it currently owns two production bases in the local area:

One is a CKD contract factory in cooperation with local enterprise Inokom, mainly responsible for fuel and hybrid model assembly production; the other is a wholly-owned complete vehicle factory located in Shah Alam, Selangor State, officially put into production in 2024, focusing on Jaecoo, Omoda high-end series and iCar new energy vehicle models.

Proton e.MAS 5

Geely did not build a factory, but chose the cooperation route.

In 2017, Geely entered the market by acquiring a 49.9% stake in the local automaker Proton. After years of development, relying on local CKD assembly and Geely technology empowerment, Proton's new energy sub-brand e.MAS series has flexible pricing space, with the entry-level pure electric model e.MAS 5 starting price only 56,800 Ringgit.

In 2025, Proton pure electric models registered 8,890 units, ranking second; from January to May 2026, cumulative registration was 11,642 units, climbing to the sales top with significant advantages.

Zeekr, as a high-end pure electric brand under Geely, focuses on SUV and MPV as the core promoted models in the Malaysian market.

Relying on the strategic cooperation between Geely and Proton to share local production lines, it does not need to build a new factory. Recently, Zeekr 7X will also undergo local CKD assembly, completing the transformation from pure complete vehicle import to localization production.

XPeng also chose to borrow local factories and existing production lines, adopting the CKD loose assembly mode for vehicle assembly. Just the day before yesterday, XPeng Automotive announced that its EPMB factory located in Malacca, Malaysia officially started production, and the first batch of G6s also officially rolled off the production line.

A head of a certain automaker preparing to enter the Malaysian market sighed that the local automotive consumption market volume is considerable, and relying on the ASEAN Free Trade Agreement, vehicles produced locally for export to neighboring countries such as Vietnam and Indonesia can enjoy preferential tariffs, and as an export track it still has stable development space.

"But adjustments to the implementation rhythm and plan are necessary."

NO.4The Market is Huge, but Risks are Not Small Either

In recent years, Chinese automakers have gone overseas in groups to seek new growth breakthroughs.

Southeast Asia has become the first stop for overseas expansion for many brands. The gasoline vehicle market here has long been monopolized by Japanese brands, electrification started relatively late, and the local industrial chain is weak. Chinese automakers, relying on the generational advantage in tri-electric technology, cost control, and intelligence, can quickly fill the market gap and form dimensional reduction strikes.

On the other hand, these countries are also willing to open their doors wide to attract investment.

Taking Thailand as an example, its Board of Investment (BOI) provided heavy benefits such as 10-13 years exemption on corporate income tax for landing automakers, which also attracted many overseas automakers to enter.

But, there is no free lunch in the world.

BOI also set strict performance conditions; automakers need to complete indicators such as specified investment amount, localization procurement ratio, annual production, etc. If standards are not met, BOI can adjust or revoke some incentives and demand recovery of tax benefits already enjoyed plus penalty interest.

"This year is the concentrated expiration node of performance agreements. To complete indicators, Chinese automakers have also started price wars in Thailand. The industry 'involution externalization' phenomenon is obvious." A head of an automaker said.

With the improvement of local industrial chain maturity, the tightening of foreign investment import, factory construction, and export related rules has become a long-term trend, and the development space relying on low prices and high volume is being continuously compressed.

"Automakers going overseas cannot only see short-term market dividends; they must assess long-term policy restrictions in advance." This head said.

NO.5Written at the End

For Chinese automakers, the window period for overseas "low price high volume" is narrowing.

Local policies will definitely continue to adjust, and the market pattern is far from set.

Although Southeast Asia is becoming a new battlefield for Chinese automakers to seek overseas growth, however, is this battlefield really easy to capture?

In the first half of 2026, auto sales broke the 15 million mark, and exports are becoming an important growth point.

Data from the China Association of Automobile Manufacturers (CAAM) shows, the monthly auto export volume broke 1 million in June for the first time; from January to June, cumulative auto exports reached 5.096 million, a year-on-year increase of 65.3%, achieving over 5 million in semi-annual exports for the first time. Regarding the annual trend, CAAM remains cautiously optimistic, with full-year exports expected to break 10 million.

In contrast to the frantic expansion overseas, the domestic market can simply be described as bleak. NIO Li Bin called for the industry to prepare for a 15%-20% year-on-year decline in domestic auto retail volume for the full year of 2026. Data shows that the first half of the year became the most prominent feature of the car market: "strong exports, weak domestic sales." Automakers that fail to achieve a global layout in the future will find it difficult to withstand market cycle fluctuations.

1

Auto Exports Exceed Domestic Sales for Some Manufacturers

The domestic auto market is undergoing a deep adjustment. In the first half of the year, auto production and sales reached 14.993 million and 15.017 million respectively, down 4% and 4.1% year-on-year respectively. Against this backdrop, exports became the key engine driving the growth of China's auto industry, and also brought high-speed growth to auto exports after two years of adjustment.

Looking specifically. In June, auto exports were 1.037 million, increasing 11.6% month-on-month and 75.1% year-on-year, with monthly export volume breaking 1 million for the first time. From January to June, auto exports were 5.096 million, up 65.3% year-on-year. More noteworthy is the structural change—the share of export sales in total production has climbed to 39.34%. This means that for every 10 cars produced domestically, nearly 4 are heading to overseas docks.

Against this backdrop, multiple automakers saw overseas market performance hit new highs.

Among them, Chery Group ranked first with export performance of 943,800, a 71.5% year-on-year increase, with overseas sales accounting for more than 70%. This automaker that has long cultivated the overseas market, exported 191,000 units in June alone, a 79.7% year-on-year increase. A more milestone signal is that Chery's cumulative exports have officially broken the 6.78 million mark.

Not just Chery, the current growth momentum of the entire Chinese auto market comes from overseas market export performance. BYD: Overseas exports 789,400, accounting for 43% of total sales; going overseas has become an important certain link; SAIC Motor Group: exported 735,000 in the first half of the year, up 48.7% year-on-year; Since Chen Jiacai took charge of GAC International 8 months ago, GAC Group's overseas offensive speed has significantly accelerated, exporting 121,000 in the first half of the year, up 132% year-on-year, close to last year's full-year level.

Putting the export data of these automakers together, a clear trend can be seen: the overseas market is becoming the core pillar driving the overall growth of automakers. Especially against the backdrop of domestic market demand peaking, profit pressure, and fierce competition, the overseas market has officially upgraded from "incremental supplement" to "core growth pole." It can be said that the more intense the domestic market competition, the stronger the urgency for Chinese automakers to go overseas.

2

Trade Barriers Are an Inescapable Reality

The deep reasons supporting this wave of export explosion are timing, location, and people. First is timing—the global auto industry is transforming towards electrification; second is location—the Chinese auto industry chain is resilient; third is people—independent brand enterprises are working hard. Overall, China's auto going global is at the best time, and presenting a good situation of "blooming in multiple points globally."

In 2023 and 2024, Russia has always been China's number one auto export destination. But looking at the past two years, China's export volume to Russia has declined. In the first five months of this year, Brazil surpassed Russia, becoming China's number one passenger car export market. In addition, the UK, Australia, and Mexico follow closely behind.

Above the top ten overseas markets, the UK, Belgium, and Italy are all located in Europe. In the competitive landscape of the EU auto market, Chinese independent brands have gradually become stronger. In May this year, five Chinese automakers—BYD, SAIC, Geely, Chery, and Leapmotor—sold a total of 138,400 units in Europe, an increase of over 60% year-on-year, while Japanese automakers' sales were 130,000 units, down 3%. Chinese autos surpassed Japan in the European market for the first time, with a market share reaching 12.01%.

Being able to enter Europe shows that our products can already meet the needs of consumers in developed countries, further proving the increasingly solid overseas competitive strength of China's auto industry. However, the hidden realistic challenges behind the high-speed development are equally impossible to ignore. For example, the EU is building walls, Brazil is raising taxes, Thailand is tightening, and the US is blocking. Global major auto markets are all setting up barriers for Chinese cars. The overseas expansion path of Chinese automakers is still full of challenges.

But Chinese automakers' response is much faster than expected, and they are laying out overseas strategies based on their own situations. Including Chery, BYD, Geely, etc., all set up production bases, R&D centers, and service networks overseas. Meanwhile, GAC Group announced plans to deploy 242 fast-charging stations in Brazil before 2030. The overseas competition of Chinese automakers is no longer just about selling cars, but starting to compete on who can truly stay locally, moving towards true globalization management.

Monthly exports breaking 1 million, 5.096 million vehicles exported in the first half of the year—not only is this a beautiful report card, but also a real breakthrough for Made in China in the global market. This year's 10 million export goal is also within reach, but more important than numbers is whether Chinese autos can establish sustainable competitiveness in the global market. In the future, China's auto globalization will enter the deep water zone, competing no longer on short-term sales, but on long-term systemic capability and global operational wisdom.

In 2026, domestic passenger cars may say goodbye to the high-growth era, officially entering an adjustment phase characterized by deep competition in the stock market and dual pressure from supply and demand. Slowing growth and profit contraction are stage challenges faced by the entire industry. Latest data from CPCA shows that in June, domestic passenger car retail sales reached 1.602 million units, down 23.2% year-on-year; cumulative retail sales from January to June were 8.701 million units, down 20.2% year-on-year. The entire product category market weakened synchronously, fuel vehicle retail sales plummeted 39% year-on-year. Domestic sales of joint ventures, luxury, and independent brands generally faced pressure. Most automakers saw varying degrees of decline in domestic terminal sales. Increasing revenue without increasing profit has become the industry norm.

Looking at the market performance from the first half of 2026, the automotive industry shows typical cycle adjustment characteristics. Whether traditional independent, leading new forces, or mainstream joint venture brands, all face varying degrees of operational pressure.

Seres Zhang Xinghai revealed at the Chongqing Auto Forum that the price of storage chips rose by more than 400%, and lithium carbonate prices doubled year-on-year. The unit cost for all AITO models under the brand increased by 15,000-20,000 yuan. Cost pressure directly led to the company's H1 performance forecasted loss of 1.05 billion to 1.3 billion yuan. Chips and battery materials are the core sources of cost increases. Voyah Lu Fang publicly stated that chip cost increases for high-end smart models broke through 300% at most. Basic consumables such as copper, aluminum, and plastics rose in price synchronously. The added cost per smart vehicle exceeded 12,000 yuan. The industry generally faces a dilemma of 'rising costs, dare not raise prices'.

Terminal market demand is weak, price wars are fierce. Automakers dare not easily increase selling prices. Upstream raw materials and chip costs rose rigidly. Profit margins are squeezed from both sides. This round of industry downturn is industrial periodical pain formed by the superposition of multiple pressures: weak consumption, skyrocketing upstream costs, overcapacity, and normalization of price wars.

This round of adjustment is a necessary stage of industry development. Short-term pressure will force the industry to eliminate inefficient capacity and homogeneous products, accelerating high-quality enterprises to complete value upgrades. Facing a unified cycle dilemma, domestic leading automakers have escaped the mindset of passively responding to price wars. They have formed systematic, long-term breakthrough strategies, focusing on four core main lines: Opening a second growth curve through global overseas expansion to offset domestic stock bottlenecks; Escaping homogeneous price involution through differentiated new product matrices; Building long-term barriers with full-stack technology self-research to stabilize cost advantages; Achieving cost reduction and efficiency gains through channel model iteration, digging deep into user value.

In sharp contrast to the domestic market downturn, automotive exports have become the core engine for industry growth against the trend. CAAM data shows that in June, domestic automotive vehicle exports reached 1.037 million units, up 11.6% month-on-month and surged 75.1% year-on-year. Monthly export volume exceeded one million units for the first time. Cumulative exports in the first half reached 5.096 million units, up 65.3% year-on-year. Among them, new energy exports grew by more than 120%. Overseas markets effectively offset domestic demand gaps, forming a new industry pattern of 'domestic pressure, overseas volume'.

Opening a second growth curve through global overseas expansion to offset domestic stock bottlenecks:

Chery maintains its position in the first tier of independent overseas exports. Cumulative exports in the first half reached 943,800 units, up 71.5% year-on-year. Exports accounted for nearly 70% of total sales. Relying on local factories in Southeast Asia and South Africa, it digs deep into emerging mass markets, effectively offsetting the pressure of domestic market involution. BYD exported 789,000 units in the first half, up 70.5% year-on-year. Overseas sales accounted for 43.6% of the group's total sales. Relying on localized capacity in Hungary and Thailand to layout European and Southeast Asian markets, it aims to achieve balanced domestic and overseas sales development, effectively offsetting domestic price war profit pressure, and relying on scaled industrial output to establish global cost and channel advantages. Changan Automobile delivered 402,000 units overseas in the first half, up 35.1% year-on-year. Relying on the 'Hai Na Bai Chuan 2.0' strategy to dig deep into emerging markets, Thai and Brazilian local factories continue to go into production. Building overseas localized operation teams and after-sales systems, focusing on exporting hybrid and smart models, using highly adaptable products to seize incremental markets in Southeast Asia and South America. Overseas sales continue to grow steadily, becoming a stable second growth curve;

Escaping homogeneous price involution through differentiated new product matrices:

In a cycle environment of severe overcapacity and product homogenization, automakers generally abandoned 'full-line low-price involution', turning to multi-brand layering, precise positioning in niche tracks, and product strategies where new and old technologies run in parallel, improving overall profit quality through structural optimization.

BYD insists on full price range coverage. Relying on the Dynasty, Ocean, Denza, Yangwang matrix, it covers household mainstream, mid-to-high-end, ultra-luxury markets. Fuel, hybrid, and pure electric are fully iterated. Solidifying the basic board with an extreme product matrix, it increases the proportion of high-margin products through vehicle structure upgrades. Changan Automobile builds a five-brand collaborative system. Qiyuan focuses on affordable hybrid home markets. Deep Blue focuses on mainstream pure electric. Avatr positions itself in high-end smart pure electric. Changan Passenger Cars stabilizes the fuel basic board. Kaiceng digs deep into commercial markets. Full price range differentiated layout, avoiding internal involution, precisely matching different segmented user demands. Geely relies on Thor Hybrid and Galaxy Pure Electric dual product lines, focusing on high cost-performance home new energy markets. Continuously iterating energy-saving hybrid models, seizing fuel vehicle replacement space. At the same time breaking through upwards with Lynk & Co luxury, optimizing overall product structure.

Building long-term barriers with full-stack technology self-research to stabilize cost advantages:

Second half of industry cycle, short-term competing on cost, mid-term competing on products, long-term competing on technology. Leading automakers continue to increase investment in core technology self-research, achieving autonomy and controllability in three-electric systems, smart driving, chips, and hybrid platforms. Offsetting cost volatility from the root and building differentiated competitiveness.

BYD insists on full industrial chain self-research and self-production. Second-generation Blade Battery, high-voltage flash charging technology fully iterated, achieving fuel and electric same-speed refueling experience. Relying on vertical integrated supply chain advantages, it stabilizes cost advantage during raw material fluctuation cycles, forming unreplicable industrial barriers. Xpeng focuses on full-stack smart driving self-research. Continuously optimizing urban NGP, full-domain intelligent assist driving system. Using smart technology as core label, building differentiated product competitiveness, escaping specification involution. Li Auto focuses on vehicle-mounted large models, self-researched computing power chips. Focusing on smart cockpit and whole vehicle smart interaction upgrades. Relying on high computing power hardware and localized smart ecosystem, building high-end smart experience barriers, supporting brand premium. Changan Automobile continues high R&D investment. Digging deep into three core technologies: Blue Whale Super Engine Hybrid, self-researched Tianshu Smart, Golden Bell Shield Solid-state Battery, achieving autonomy and controllability in hybrid, smart, and battery technologies. Both supporting domestic product differentiated upgrades, also providing core technology endorsement for overseas models.

Comprehensive mainstream automaker cycle response actions show that the current domestic automotive industry is experiencing a round of deep adjustment. This is a natural periodic correction after years of scaled expansion. Narrowed profit space and slowed market sales growth are stage problems faced by the entire industry. This does not mean the development momentum of leading automakers has stalled. Need to view the industry status objectively with a long-term industrial perspective.

Through short-term market pain, the automotive industry's three long-term upward development trends remain stable and unchanging. First, electrification and intelligence transformation are already irreversible core main lines of the industry. New energy and smart cars will continue to replace traditional fuel vehicles, reshaping market patterns. Secondly, the trend of Chinese car exports is strong. Overseas market share steadily climbing. Globalization development dividends are still being released continuously. Finally, industry reshuffling accelerates. Market resources are concentrating on leading enterprises with complete overseas layouts, core self-research technologies, and multi-brand differentiated product matrices. Advantaged automakers will continue to seize the market at the bottom of the cycle.

Leading automakers represented by BYD, Geely, Changan did not passively respond to short-term market pressure. Instead, treated this round of cycle as a key window for strategic power accumulation. Synchronously increasing global layout, new product launch, and underlying core technology R&D. Solidifying long-term competition foundations. Price competition and profit pressure are just inevitable pains of industry survival of the fittest. High-quality automakers with global strategies, full-stack self-research technologies, and layered differentiated product systems possess strong risk resistance capabilities. They are able to safely traverse the industry downturn cycle, welcome greater development opportunities in the next round of industry upswing.

Recently, MG returned to its brand birthplace, the UK, held a technology sharing session in London, then rushed to the Goodwood Festival of Speed for the global premiere of two concept cars. MG Go! Agile Pure Electric Small Car and Cyber Concept Coupe SUV appeared together. On one side was the century-old British racing heritage, on the other, mature and complete Chinese intelligent electric technology. The two events did not deliberately create a buzz, yet calmly demonstrated the posture of Chinese automakers looking globally and proceeding steadily, and also just confirmed the outstanding results SAIC achieved in its overseas market in the first half of this year.

MG GO! Concept Car

MG Cyber Concept Car

Overseas Half-Year Sales Continue to Rise Steadily

In the first half of 2026, SAIC's overseas market was very fruitful, with cumulative exports reaching 735,000 units, up 48.7% year-on-year; looking at June alone, overseas sales reached 146,000 units, surging 61.2% year-on-year, setting a new sales record, consistently ranking in the first tier of Chinese automakers going global.

As the backbone of SAIC's overseas layout, MG has topped the sales of Chinese brands in Europe for 11 consecutive years, and is also the first Chinese automotive brand with cumulative sales exceeding 1 million units in Europe. In the first half, MG sold over 190,000 units in Europe, and MG4 Urban has entered mainstream households in Germany.

Looking at the global map, Europe has grown into a key 300,000-unit level market for SAIC. The five major regions of Americas, Middle East, Australia-New Zealand, ASEAN, and South Asia have stably maintained sales volumes in the 50,000-unit level. Today, SAIC's business covers over 170 countries and regions, with overseas cumulative sales exceeding 7 million units. Not only was passenger car performance outstanding, SAIC commercial vehicles also opened a new track, with SAIC Hongyan securing an order for 1,000 new energy heavy-duty trucks in Thailand, breaking the situation of foreign brands monopolizing the local heavy-duty truck market. Passenger cars and commercial vehicles proceeding on two lines, coordinating to explore overseas markets.

Diverse Products Calmly Adapt to Global Diverse Needs

Outstanding market performance has never come from piling up low prices and sales volume. Core confidence comes from SAIC's self-developed technology honed over many years. MG has built three mature technology systems facing the global market: Hybrid+ Hybrid System, SolidCore Semi-Solid-State Battery, and i-Smart Intelligent In-Vehicle System.

Scene of MG UK Technology Conference

At the London Technology Conference, MG fully displayed the full set of intelligent electric technologies, and is also the first automotive brand globally to achieve mass production implementation of semi-solid-state batteries. IM AD Intelligent Driving adapts to road conditions on all five continents. MG Parking Smart Cockpit is finely tuned for overseas driving habits, and overseas i-Smart infotainment activation volume has exceeded one million. The two concept cars debuted at Goodwood extracted the design core of MG classic racing cars, fused with new aesthetics of electrification, balancing brand history and future mobility imagination.

In the next three years, SAIC will gradually launch global new products. Powertrains cover four types: Fuel, Hybrid, Plug-in Hybrid, and Pure Electric. More than 10 sedan, SUV, MPV, and Pickup models will be launched successively to the market, balancing various scenarios such as city commute, family travel, outdoor self-driving, and high-end driving, gently covering global mainstream sub-markets.

Glocal Strategy Deeply Cultivates Locally According to Local Conditions

Many automakers going overseas are accustomed to directly copying domestic products and operation models, applying one standard to adapt to all regions. After landing, it is easy to be incompatible and difficult to fit local users' real driving habits. SAIC chose to walk the Glocal global localization route, doing no one-size-fits-all, slightly adjusting products and services according to regional characteristics of different markets.

European highway network is developed, regulations are strict, so targeted optimization of chassis tuning and intelligent driving logic was done. The Middle East has high temperature all year round, specially strengthened three-electric system heat resistance protection to ensure stable vehicle operation in high-temperature environments. Indian daily commute scenarios are special, continuously iterating cockpit interaction functions to fit local driving preferences. Central Asia cooperated with local automakers to land production, with SAIC Volkswagen multiple new cars landing in Uzbekistan, completing regional market layout breakthrough. Thailand launched MG SMILE exclusive service system, providing lifetime warranty for three-electric systems for pure electric models, sorting out local after-sales chaos. Currently, local MG ownership volume has exceeded 250,000 units.

Building a Full-Link Overseas Ecosystem

True long-term globalization has never been short-term whole vehicle export, but slowly building a complete overseas system integrating technology, products, production, and service. This is also the key to SAIC's overseas market having stronger risk resistance capabilities.

On the production level, emerging markets such as Central Asia and West Africa cooperated with local enterprises to build factories, production on site compresses transportation costs, steadily digging into incremental space. On the service level, building European direct sales outlets in Belgium and Luxembourg, offline service stores exceed 2,000, matching long-term warranty in various places, eliminating overseas users' driving concerns. On the operation level, relying on local teams to face consumers directly, timely capturing market changes, slowly completing the transformation from "selling cars" to "operating users with heart and accumulating brand reputation".

From simple whole vehicle export to full value chain overseas of technology, manufacturing, and service, MG's two appearances in Britain this time is exactly a true portrayal of the steady growth of China's automotive industry. Relying on the calm and pragmatic Glocal globalization system, SAIC has shined the "China Intelligence" sign in the global market, leading Chinese automotive brands to complete the solid advance from simple "Going Out", to securely "Walking Steady, Walking Far".

The first half of 2026, China's car market produced a somewhat complex performance report.

Data from the CPCA shows that domestic passenger vehicle cumulative retail sales reached 8.701 million vehicles from January to June this year, a year-on-year decrease of 20.2%. Affected by the contraction in total market volume, the sales growth rate for the vast majority of automakers slowed down in the first half, and annual growth targets came under pressure.

This is because the era where "delivery volume" determines ranking and success or failure has passed. With the fuel vehicle base accelerating its momentum loss, volatility in overseas policies intensifying, and the industry's average profit margin dropping to the 3.4% warning line, the competitive dimension of China's car market is shifting from "scale competition" to "structural generation gap".

Behind the sales figures, the invisible gap that truly determines life or death has already widened.

The sales landscape has changed again

Gasgoo statistics on the sales situation of nearly 20 automakers in the first half showed a clear step-like distribution.

SAIC Group returned to the sales summit with 2.045 million vehicles, becoming the only full-vehicle group to break through 2 million vehicles so far. This time SAIC returned to first place, relying on the combined efforts of independent brands, new energy vehicles, and exports, achieved through a "radical reform" upon itself.

BYD cumulative sales for the first half reached 1.809 million vehicles. Although the domestic market had declined, relying on overseas market growth, it welcomed a recovery momentum of 403,500 vehicles in June.

Geely (1.423 million) and Chery (1.358 million) are accelerating the chase from behind, further narrowing the gap with the top two. The top tier formed by these four no longer competes on how many of a single blockbuster car was sold, but on whose full industry chain turns faster and whose overseas channels are deployed deeper.

Compared to the blossoming of the top tier, the survival status of the second sales tier exposes the cruelest side of this elimination race: the incremental volume of new energy vehicles is starting to fail to fill the gap left by the decline in fuel vehicles.

Changan is like this, selling 1.196 million vehicles in the first half, a year-on-year decrease of 17.4%. The problem it faces is that the speed of the decline in the fuel vehicle front exceeds the replacement speed of new energy brands.

GAC Group cumulative sales for the first half reached 773,000 vehicles, up 2.4% year-on-year, with moderate performance, urgently needing a new blockbuster. Perhaps the Qijing brand, built with Huawei, could be the breakthrough. Great Wall (584,000) increased slightly by 2.5%, but under the double-pronged attack from rivals on plug-in hybrids and pure electric, the shortcoming of a low proportion of new energy vehicles continues to drag down the overall market.

In this dramatic structural change, the confrontation between the camps of emerging new forces and joint venture brands is exposing deeper differences.

New forces have mostly achieved impressive growth rates. Leapmotor sold 356,000 vehicles in the first half, soaring 65% year-on-year. Zeekr, NIO, and Harmony Intelligent also had fierce offensives, especially the former two with year-on-year growth rates exceeding 60%. However, brands like Li Auto and XPeng encountered sales declines due to insufficient new product competition.

NIO's sales breakthrough was largely thanks to mutual support from three major brands: NIO, Onvo, and Firefly. For example, in an environment where the industry generally relies on aggressive pricing to exchange price for volume, Onvo delivered 42,000 vehicles in the first half, and the average transaction price held above 240,000 yuan, achieving a balance between sales growth and price stability, helping NIO achieve significant improvement in performance fundamentals.

Conversely, foreign brands continue to face pressure in China. CPCA data shows that retail sales of mainstream joint ventures decreased by 34% in June. Among them, SAIC Volkswagen shrank by over 30% in the first half, and GAC Honda was directly halved to 68,000 vehicles. The core issue foreign brands face in China remains how to break the inertia of momentum loss caused by the contraction of the fuel vehicle base and achieve scale effects in the new energy market.

Saying goodbye to broad rises, new energy vehicles enter the structural competition stage

No denying, new energy vehicles remain the deciding factor for the overall car market. In June this year, the retail penetration rate of domestic new energy passenger vehicles soared to a historical high of 62.8%, while pure fuel vehicles plummeted by 42%. But upon closer inspection, the bonus period of broad rise in the new energy market has ended.

As CPCA Secretary General Cui Dongshu put it, the new energy market is sliding towards a polarization of "high-end explosion, low-end pressure".

Data is the most direct microscope. In June, wholesale sales of Class B pure electric vehicles surged by 37% year-on-year, while sales in the A00 class pure electric market, serving as entry-level commuter tools, were directly halved by 50%. Consumers no longer buy simply for green license plates or cheapness, but have focused their gaze on products with higher configurations and stronger intelligent capabilities.

In this structural reshaping, resources are accelerating to converge at the top. Only 20 new energy automakers achieved wholesale sales over 10,000 in June, yet they accounted for 94% of the market share. Among them, independent brands took over more than 60% of the share, emerging new forces split 26%, while the share left for mainstream joint venture brands was only 4.3%.

But even within independent brands holding absolute advantages, differentiation is intensifying.

BYD locks the leading position thanks to coverage of the full price range. Geely advanced on dual lines of plug-in hybrids and pure electric vehicles, with new energy scale reaching 800,000 in the first half, and penetration rate approaching 60%. In contrast, while new energy transformation at companies like Chery, Changan, and Great Wall is accelerating, penetration rates still hover around 30%.

And in the new forces camp, the generation gap in growth rates often depends on who can trickle down high-end technologies to the mainstream market.

Leapmotor is a typical representative, with June sales reaching 93,000, far exceeding Li Auto, XPeng, NIO, etc. The explosion of Leapmotor is essentially based on full-domain in-house R&D cost control capabilities, building an SUV product matrix in the core market under 200,000 yuan, turning intelligence and high configuration into inclusive products. This extremely lethal cost-performance strategy allowed it to expand its market share under the general market pressure on the low end.

Different from Leapmotor relying on a full-spectrum blockbuster to break out upwards, NIO is achieving technology spillover downwards through sub-brands. For example, its sub-brand Onvo leverages NIO's system technology and battery swapping network, bringing 900V high-voltage architecture, self-developed chips, and operating systems, originally belonging to flagship models, into the 200,000 to 300,000 yuan family vehicle market, solving refueling anxiety for pure electric users.

In contrast, due to new products being in a replacement vacancy period or lacking sufficient competition, growth rates for some automakers like Li Auto and XPeng slowed to varying degrees in the first half.

Market increments are accelerating to concentrate at top automakers. Players who can continuously produce blockbusters and build full-spectrum matrices are building competitive barriers higher and higher.

Overseas competition has entered the "deep water zone"

While reshaping the domestic market competition landscape, the overseas market has become the second growth pole that almost all automakers are vying for.

In June this year, domestic passenger vehicle exports surged 82.3% year-on-year to 877,000 vehicles, with new energy exports soaring 152.7% even more. Exports are no longer garnishes on automaker financial reports, but have become key variables influencing the overall market.

However, in the second half of going overseas, the focus of competition has shifted from "how many cars were exported" to "whether one can establish global operations and risk resistance capabilities". In other words, single trade-type exports are entering a downward phase, while overseas localization production and globalization system construction are becoming the invisible gap that truly widens the generation gap between enterprises.

In this global leap, the differentiation at the top has already begun to show signs.

Among the automakers, Chery remains a typical "global harvestor" domestically, with cumulative exports reaching 944,000 vehicles in the first half, achieving a high-speed growth of 71.5%. Its export scale ranks first in the domestic automotive industry, with overseas sales accounting for nearly 70% of total sales. The channel advantages formed in Latin America, the Middle East, and Russia have built a very thick survival foundation for Chery.

More worthy of attention are players like BYD who are completing the leap from exporting products to exporting systems. With overseas factories in Thailand, Brazil, etc., gradually starting production, BYD's overseas sales climbed to 789,000 vehicles in the first half, nearly doubling year-on-year. Its overseas sales have accounted for 40% of total sales. This approach of "building factories in the opponent's home base" is the best way to avoid tariff barriers and achieve localization rooting.

At the same time, Geely and Changan are also accelerating tactical shifts. Geely accelerated the overseas launch of affordable series like Starship, recording an export scale of 474,000 vehicles in the first half, with June alone breaking 100,000 vehicles. Changan pulled export growth by 35% to 402,000 vehicles through overseas efforts on new energy models like Deepal and Qiyuan.

While some are accelerating, others are bearing the pressure of defending their city. SAIC exported 735,000 vehicles in the first half. Although relying on the MG brand for deep cultivation in Europe, Southeast Asia, etc., maintained stable shipments, it has already shown signs of being overtaken by Chery and BYD in the landing pace of overseas localization capacity. With competitor localization factories in Europe and Southeast Asia gradually starting operations, if SAIC cannot quickly upgrade overseas system bonuses, its past first-mover advantage will face the risk of continuous erosion.

In the new forces camp, Leapmotor took another shortcut. It cooperated with the international giant Stellantis, leveraging the latter's global channel network and production bases. Its overseas scale quickly approached 100,000 vehicles in the first half, successfully walking a path of light assets and high-efficiency globalization.

XPeng is also accelerating the expansion of the overseas market. In the first half, its overseas sales reached 32,000 vehicles, up more than 70% year-on-year, increasing the proportion of total sales to about 20%. Chairman and CEO He Xiaopeng had explicitly stated the strategic goal of "half of sales coming from overseas in the next ten years".

XPeng tries to bet directly on the global battlefield by self-operating technology, putting intelligent advantages there. Currently, the results of this strategy are initially visible. But under the current international geopolitical environment, this will put extremely high cross-cycle requirements on the enterprise's overseas supply chain elasticity.

Especially, this year's demand fluctuations in some Middle East markets, and the uncertainty of the global trade environment, objectively tested the risk resistance cycles of each automaker. The traditional single trade model relying solely on domestic production and sea shipping exports, when facing overseas policy adjustments, has a relatively short defensive depth.

This also means that the focus of competition in the second half of going overseas is no longer the frequency of sea shipping logistics, but the construction and landing of overseas localization capacity.

How to break through the final exam in the second half?

The data of half a year is just the process. What the market truly cares about is: Can the sales targets set at the beginning of the year still be completed?

According to Gasgoo Auto Research Institute's forecast, China's passenger vehicle wholesale sales in 2026 will be about 29.634 million vehicles, a slight decrease of 1.4% year-on-year. The overall market is basically treading water, meaning any automaker's growth must snatch food from opponents' mouths. At the node of the first half ending, the gaps in completion rates among each family have already widened.

BYD has not publicly disclosed clear annual sales figures, but forecasts given by UBS and other institutions are around 5 million vehicles. Supporting this massive volume is domestic full price range product coverage and the continuous release of overseas capacity. With the production launch of factories such as Thailand and Brazil, BYD's overseas expansion has upgraded from product output to system output.

Among automakers that have disclosed specific goals, Geely and Chery have higher completion rates, both around 40%, with both having clear sales pillars supporting them.

Geely's new energy penetration rate broke through 60%, running volume on dual lines of plug-in hybrids and pure electric. In the second half, its domestic market will continue to harvest 100,000 to 200,000 yuan mainstream new energy share through models like Starship E5 and Starship 7, and plans to enter the mid-to-high-end track through new products like Starship TT. Overseas will leverage affordable vehicles of the Starship series to land in Europe for volume boosting, and target overseas high-end premium markets with models like Zeekr 9X, thereby hedging against domestic involution.

Chery's overseas exports shoulder nearly 70% of sales, with channel bonuses in markets like Latin America, Middle East, Russia still being released. In the second half, Chery puts its focus on Europe and emerging markets. Through the new brand LEPAS, hybrid flagship layout in Europe, and model launches like Exeed ET8 in Russia and Central Asia, it uses a strategy of blossoming in multiple points to maintain lightweight growth throughout the year.

In contrast, Changan and Great Wall are the two with low completion rates. Changan's annual target is 3.3 million vehicles, completed 36% in the first half. In the second half, the ramp-up speed of new models like Deepal L05, Qiyuan Q06, Avatr 07 L, etc., will directly affect Changan's sales.

Great Wall's completion rate is also around 30%. Its Tank series stabilized the basic platform of hardcore off-road through plug-in hybrids, but the real volume-driving Haval brand lacks an absolute blockbuster in the new energy mass market. In the second half, whether new models like Tank 300, Haval H10 can tear open a breakthrough in the mainstream new energy market is the variable for Great Wall to reverse the situation.

SAIC also faces considerable pressure to achieve an annual target of 5 million vehicles. Its core highlights for the second half lie in whether the incremental release of new energy models like IM Motors and STELATO Z7 can be released, and whether the decline amplitude of the joint venture basic platform can be narrowed.

In the new forces camp, second half pressure also shifted to rapid volume increase of new product sequences. Leapmotor's annual target is 1.05 million vehicles, completing 30% in the first half. To achieve the target in the second half, monthly average sales need to be pulled to above 110,000. Besides the C-Series holding the basic platform under 200,000 yuan, the high-end D-Series and Lafa5 Series will become the main attackers for volume boosting.

NIO anchors its annual growth target around 40% (about 450,000 vehicles), betting most of the increment on Onvo. In the second half, as flagship models L90, L80, and new L60, etc., welcome the product explosion cycle, Onvo's market performance will directly affect NIO's final results for the year.

XPeng and Harmony Intelligent completion rates are also around 30%. XPeng will quickly increase volume in the second half relying on the global launch of new series like MONA L03, GX. Harmony Intelligent needs to rely on new products like STELATO G9, Qijing GT7, etc., to pull deliveries.

The direction of foreign joint venture brands lacks suspense. Under the pinch attack of continuously shrinking fuel base and new energy products far from forming scale, the main task for joint venture brands in the second half can only be to try to slow down the decline speed. Gasgoo Auto Research Institute forecasts that Volkswagen China is expected to reach around 2 million vehicles for the year, and Toyota in China around 1.3 million.

Of course, sales targets are only surface rulers. In January-May this year, China's automotive industry profit margin has dropped to 3.4%. In the second half, if continuing to rely solely on price cuts to boost volume, it will only further overdraft the blood-making ability of enterprises to survive in the deep water zone. At this stage, blindly stacking delivery numbers has lost practical significance.

The real deciding factor is to see whether each automaker can solidly convert the product cycles planned in hand into quality and cash flow-supported scale explosions.

The first stock in Physical AI, Momenta officially rings the bell on the Hong Kong Stock Exchange, market cap close to 70 billion HKD. Public offering oversubscribed 414 times, international capital such as Singapore Government Investment Corporation, Fidelity International, Oaktree Capital followed the investment. This subscription heat is quite rare in the Hong Kong stock market in recent years.

Many people might not be very familiar with this company yet. Simply put: Momenta was founded in 2016, one of the earliest companies in China to do high-level intelligent assisted driving. You might not have heard its name, but the intelligent driving system in the car you drive is likely the solution provided by Momenta.

How strong is Momenta's industry status? Look at July 8th, nearly 20 automakers applauded its IPO together, you can feel the company's industry recognition is not to be underestimated.

Cumulative deployments exceeded 1 million units, 9 of the top 10 global automakers cooperate, third-party city NOA market share 65%, firmly ranking first in the industry, landed in over 10 countries including Asia, Europe, Oceania, etc.

In the global intelligent driving track, a competitive pattern of FSD, Momenta, and Huawei advancing together has formed. Relying on proprietary underlying technology + deep adaptation to Chinese road conditions, Momenta has become one of the only two Chinese intelligent driving forces with global competitiveness.

But the relationship between Momenta and these OEMs is far more than supplier and customer. SAIC, Mercedes-Benz, BYD have upgraded from customers to shareholders, SAIC, Mercedes-Benz, BYD all appear in the investor list. At the same time, Momenta deeply binds intelligent driving business with SAIC, GAC, the two parties form an industrial community of risk sharing and value sharing, at the technical level even deeper co-creation, cooperation almost covers the whole series of models. This forms a virtuous cycle — automakers use Momenta's solution, make money, and in turn continue to invest in Momenta.

The result is Momenta's revenue tripled in three years, reaching 2.413 billion in 2025, compound growth rate exceeding 80%, gross profit margin rose from 17.5% to 71.6%. CEO Cao Xudong said: The "GPT moment" of Physical AI has arrived. The next decade, what Momenta wants to do is General Physical AI — not just cars, but also Robovan, Robotaxi and robots.

A sample of Chinese AI going global, Momenta is already in the lead.

Author: Shi Ke

Every few years, the automotive industry is declared to be "entering an elimination race". In 2018, they said elimination was coming, in 2020 they said winter was here, in 2022 they said reshuffling started, in 2024 they said they couldn't compete anymore, by 2026, after swapping a batch of executives, someone says again: this time it really enters an elimination race.

Why hasn't this industry been eliminated completely?

Seeing titles like "160+ executive changes" and "densest personnel shake-up in ten years", the first reaction isn't nervousness, it's fatigue. The data is piled up neatly, the conclusions are drawn decisively, reading it feels like an industry report with exclamation marks added. But is the market really that terrible?

Not necessarily.

Change perspective: What if this isn't the apocalypse?

From 2015 to 2018, China's mobile internet also went through a round of "the densest in history" management iteration. BAT collectively "had a blood transfusion", O2O companies were found dead everywhere, shared bicycles lay colorfully on the streets. Back then, the voices depreciating the mobile internet were much louder than the voices depreciating cars now.

So what was the result?

ByteDance "grew" TikTok within that "winter". Pinduoduo found trillion-yuan level opportunities in the downward-tiered markets that no one looked down upon. Meituan climbed out of the sea of blood from the "Thousand Group War" and became a giant in local life. The internet didn't die; instead, it moved from inception to maturity.

The Automotive Industry is Walking the Same Path Now

Over the past 5 years, new energy penetration rate went from 5% to over 60%. That was a wild era, whoever was bold enough could take off. But now penetration passed 60%, the game rules changed. From "whether there is one" to "whether it is good", from "grabbing territory" to "competing in internal power". The people needed now are no longer bold heroes, but professional managers who understand systems, AI, and the global market.

A bunch of companies simultaneously changing executives looks like something is wrong with the industry. Actually, the industry changed, and companies are desperately trying to make themselves match the new battlefield.

This isn't an elimination race. It's just that the rite of passage comes with a bit of pain.

People crying about domestic sales are calculating a confused account - retail sales of passenger cars dropped by nearly 20% in the first 5 months, profit margin was 3.2%, a historical low. The numbers are real, but if you shout "apocalypse" looking only at these numbers, your vision is too narrow.

In 2023, China exported 4.91 million cars, surpassing Japan for the first time to become number one globally. In 2024 it rose to 5.8 million. BYD built factories in Thailand, Brazil, Hungary; Chery went to Spain to acquire factories; SAIC, Great Wall, Geely expanded capacity to all continents globally. Domestic dropped by 20%, overseas rose by nearly 50%. Using the "domestic retail sales" metric alone to sentence the entire industry to death is like using a thermometer for a full-body checkup. You found a fever, but didn't see the person gaining muscle.

Then there's the saying that "370 million units in possession is the ceiling". People who say this have their minds stuck in the fuel vehicle era.

Back then, a car was driven for ten years, so of course it hit the ceiling. But now cars are becoming AI terminals, smart driving capabilities iterate every six months. When cars change from "durables" to "tech consumer goods", replacement cycles will shorten significantly. Possession volume is not a ceiling; it's a huge pool waiting to be reactivated.

The "Price War" Can No Longer Work? Thank Goodness

"The continuous 3-year 'price war' is invalid, low prices can no longer stimulate consumption." This sentence was cited everywhere as evidence of pessimism, but it is actually the best news of 2026.

The "price war" of 2023-2024 pressed industry profit margins to the historical low of 3.2%. What flooded the market during that time? Products just for the sake of being cheap, configurations shrinking, quality declining, safety hazards frequent. Car companies fell into a dead loop of lowering prices to move volume, shrinking profits, and cutting R&D; consumers also didn't gain any advantage. Only after buying did they realize that the little money saved was all spent on car repairs and regret.

But starting in 2025, the market changed.

BYD's cars above 200,000 yuan sell better and better. Huawei AITO M9 average price over 500,000 yuan, monthly sales stably breaking 10,000 units. Xiaomi SU7 exploded upon launch, relying not on low price but on product definition capability. Li Auto, amidst the pain of pure electric transformation, the L series still dominates the niche market.

These enterprises have one thing in common: they are not the cheapest in their respective tracks, but consumers are willing to pay.

To put it plainly, Chinese consumers have matured. Evolved from "buy whoever is cheap" to "buy whoever is good". The "price war" fizzled out because price sensitivity decreased, and value sensitivity increased. This is a huge benefit for companies with real abilities; the days of "bad money driving out good" have finally ended.

Li Auto Lost 12 People, So What?

"Li Auto had 12 core executives resign in half a year" was portrayed repeatedly as a crisis signal, but few people mentioned another matter: Li Auto simultaneously recruited AI algorithm engineers, smart cockpit experts, and autonomous driving architects on a large scale at a faster speed.

12 left, maybe 120 recruited. What is the direction of talent flow? From traditional automotive positions flowing to AI positions. This is not talent drain, it is strategic "blood transfusion".

NIO's logic is the same. Massively poaching cross-industry talent from Huawei, Apple, DJI. Li Bin doesn't want people who know how to build cars better, he wants to turn NIO from a car-building company into an AI-driven mobility tech company. "Changing commanders" is not to save sales, but to equip new teams for the new strategy.

Changan promoted two post-80s vice presidents. The personnel logic of large state-owned enterprises changed. The era of software-defined cars doesn't need experienced "old masters", it needs new managers who can iterate quickly and dare to make mistakes.

BBA deployed headquarters' overseas executives to directly manage the China region, interpreted as "powers consolidating overseas". This interpretation is really a bit funny. If the Chinese market really wasn't working, what did the European headquarters send the strongest lineup for? Retirement? Quite the opposite. In fields like smart cockpits, high-level smart driving, China's innovation speed has already led Europe by one or two steps. BBA upgraded China from "sales market" to "global innovation base". This is "putting out fires", not centralizing power.

What We Should Really Worry About is Not Who Left, but Who Hasn't Arrived

Personnel changes themselves have never been the root of the problem, they are just the appearance. Changing a CEO cannot save a company with bad products, but a good strategy matched with the right people can allow a mediocre company to be reborn.

The biggest risk in the current automotive industry is not that "changing commanders" is too frequent, but that some companies haven't changed thoroughly enough.

Some car companies are still fighting stock wars with incremental era tactics: fighting on price, stacking configurations, competing on parameters, but uniquely not competing on user experience. Some management teams are still holding ten-year-old meetings, making ten-year-old decisions, looking at today's market with ten-year-old eyes. These are what should truly be eliminated.

The "wave of changing commanders" in 2026 eliminates not the industry, but the tactics of the old era. And those companies that first complete organizational iteration, think through the strategy, and assemble the team will become stronger after this round of adjustments.

Winter for the automotive industry hasn't come. It just took off the "old clothes" of the inception period, ready to step into the next decade.

Author | Guo Yue

Editor | Zhi Hao

Production of Chinese cars begins in multiple regions overseas, marking a new milestone for Chinese automakers' global expansion.

In the last three days, Chinese automakers have made new progress in their global expansion: Xpeng Motors just announced that its third local production base globally has officially started production. The first batch of G6s from the EPMB factory located in Malacca, Malaysia, has officially rolled off the assembly line, and production ramp-up has begun.

Xpeng's third local production base globally officially starts production

On June 23, Leapmotor International, a joint venture between Leapmotor Motors and Stellantis, completed the construction of a battery assembly workshop in Malen City, Spain. The planned annual capacity for battery modules is about 65,000 sets, with a maximum expansion potential to 100,000 sets.

On June 22, Chery inaugurated a new production line at the Ebro factory operated through a joint venture with the Spanish Ebro Automotive Group in the Barcelona Free Trade Zone of Spain, further enhancing production capacity.

Almost at the same time, Canadian Federal Minister of Industry Melanie Joly revealed that BYD, Chery, and Geely, the top three Chinese automakers, are actively exploring the possibility of establishing a joint venture passenger vehicle factory in Canada.

From Southeast Asia and Europe to North America, from complete vehicle manufacturing to core three-electric system support, multiple major announcements landed densely within just three days, making the offensive of Chinese automakers going global even stronger.

This is not accidental. According to incomplete statistics from Che Dongxi, 10 mainstream automakers including Dongfeng, BYD, Changan, SAIC, Chery, Xpeng, Great Wall, etc., all have new moves in overseas markets — either building factories locally, establishing joint venture companies, or acquiring overseas automaker production lines, deepening the overseas layout.

Local production is no longer an optional strategy for Chinese automakers going global, but a necessary choice for Chinese car brands to break tariff barriers and deeply cultivate regional markets. A global upheaval from "product output" to "industrial rooting" is fully unfolding.

I. Chinese automakers "buy up" global factories, deepening local layout

Since the beginning of 2026 until now, news of domestic top automakers landing overseas factories has almost never stopped, and the local production layout of Chinese automakers is unfolding at an unprecedented speed.

Among these, Europe has become the core battleground for domestic automakers' recent overseas factory layout, with Chery Group, SAIC Group, and Leapmotor all welcoming new progress in their local layout in Europe this month.

Recent progress in overseas layout by Chinese automakers in the last three months

Multiple foreign media reports stated that Nissan Motors has signed a non-binding memorandum of understanding with Chery. According to the agreement, Nissan's passenger vehicle base in Sunderland, UK, will begin using its Line 1 to contractually produce passenger vehicles for Chery starting from April 2027. Existing models such as Qashqai, Juke, and Leaf will be consolidated into Line 2 for centralized production, while idle production lines will handle Chery's localized manufacturing demands.

Nissan UK Sunderland Factory

On local time June 2, the Galician Regional Government of Spain announced that SAIC Group plans to build its first electric vehicle factory in the EU at the Port of Ferrol, with an initial investment of about 200 million euros (equivalent to about 1.568 billion RMB).

SAIC Group plans to build the EU's first electric vehicle factory

The factory will focus on the production of new energy models. Construction may start next year, operations begin in 2028, and the factory's annual capacity is expected to reach 120,000 units.

In May, the European local layout of Chinese automakers was equally dense.

On May 20, Stellantis and Dongfeng Group announced their cooperation, intending to establish a joint venture in Europe. Stellantis holds 51% and Dongfeng holds 49%. In the announcement, Stellantis Group stated that this joint venture is expected to be responsible for the sales and distribution business of Dongfeng Group's Voyah brand models in designated markets in Europe. Both parties also have intentions to carry out local production of Dongfeng Group's new energy models at Stellantis' Renault factory in Rennes, France.

On May 8, Stellantis also announced an expansion of strategic cooperation with Leapmotor Motors. The two companies plan to carry out capacity sharing at Stellantis Group's factories located in Madrid and Zaragoza, Spain, to comply with "Made in Europe" requirements.

Thus, from contract manufacturing, self-building to joint venture capacity sharing, Chinese automakers are deeply penetrating the European manufacturing heartland through multiple paths.

In addition to the aforementioned announced cooperation, at the end of April this year, according to Reuters citing informed sources, FAW Hongqi may be negotiating with Stellantis, intending to utilize the latter's factory in Spain for local production.

Spanish media "LaTribunadeAutomoción" also reported that Geely may reach an agreement with Ford Motor to acquire the Ford Body 3 assembly line located in Almussafes, Valencia, Spain, and use it for new energy model production.

In addition to accelerating the layout in the European market, the local layout of Chinese automakers in markets such as Southeast Asia, Middle East, Americas, Africa, etc., is also accelerating, with flowers blooming in multiple points.

In the Southeast Asian market, on May 13, Xpeng Motors officially acquired 90.1% of the equity of the EV manufacturing entity EIDO under the listed company PT Sinar Eka Selaras Tbk in Indonesia.

Xpeng acquires equity of Indonesian car factory

The core asset of this acquisition is the EIDO electric vehicle production and assembly factory located in Plakarta, West Java Province, Indonesia. This factory is Xpeng Motors' first overseas production base, adopting the Completely Knocked Down (CKD) model.

In the Middle East market, on April 25, Li Auto signed agreements with two Middle Eastern dealers, Al Fahim Motors in the UAE and Mohamed Yousuf Naghi Motors in Saudi Arabia, declaring the entry of Li Auto L series models into the Middle East market.

Li Auto signs with Middle Eastern dealers

In the Americas market, on March 27, Changan Motors and partner CAOA Group jointly opened a new chapter in Brazil's automotive industry. The highly automated production line located in Anápolis was officially completed and put into production. Changan Motors' Brazil factory's first phase plans to launch 3 models, covering various power forms such as fuel, hybrid, and plug-in hybrid.

Changan Motors Brazil factory officially completed and put into production

In the African market, according to foreign media reports, executives of Great Wall Motor's South Africa company revealed that they are weighing two local production plans in South Africa — either sharing production facilities with other automakers, or acquiring existing factories if conditions permit, and have already started negotiations with Mercedes regarding this.

Looking at a series of cases, the actions of Chinese automakers to land overseas capacity are increasing day by day. A large number of layout projects are moving from the signing agreement stage to the production stage, and the overseas expansion of Chinese cars is advancing at an unprecedented acceleration.

II. Domestic increase faces a ceiling, going global is the inevitable choice for automakers to break the situation

Why do automakers want to accelerate local layout?

The answer points directly to the fierce competition in the domestic automotive market. Currently, the Chinese automotive market has shifted from incremental expansion to stock game.

According to data released by the CPCA, if calculated by broad passenger vehicles, the cumulative retail sales of the national passenger vehicle market reached 7.178 million units in the first five months of this year, down 19.7% year-on-year. During the same period, export sales reached 3.4 million units, soaring 67.7% year-on-year.

Comparison of year-on-year growth rate of national passenger vehicle retail sales and export sales in the first 5 months of this year

When domestic price wars continuously compress automakers' profit margins, overseas markets have become the key direction for automakers to seek incremental growth.

However, going global does not equal simple complete vehicle export. Chinese automakers' complete vehicle export is usually constrained by multiple factors such as transportation costs, tariff policies, and market access.

The biggest challenge Chinese automakers face in going global is often not about selling cars, but about placing capacity overseas.

For this reason, local production is significant for automakers' overseas layout. It is not only an effective path to avoid trade barriers and reduce comprehensive costs, but also the foundation for deeply embedding in regional markets and achieving long-term operations.

Meanwhile, the operational difficulties faced by multiple overseas automaker giants have provided opportunities for Chinese automakers' overseas layout.

In recent years, multiple overseas automakers have been significantly pressured in electrification transformation, showing declining performance one after another.

Stellantis Group's net loss in 2025 reached as high as 22.3 billion euros (equivalent to about 174.8 billion RMB), turning from a net profit of 5.5 billion euros (equivalent to about 43.1 billion RMB) in 2024, for the first time in nearly 5 years falling into annual loss; Nissan's operating profit in the 2025 fiscal year dropped 16.9% to 58 billion yen (equivalent to about 2.4 billion RMB); Mercedes-Benz Group's net profit in the 2025 fiscal year was 5.331 billion euros (equivalent to about 41.8 billion RMB), a year-on-year decrease of 48.8%, setting a new low in nearly 5 years.

Stellantis Group 2025 Performance

Behind the decline in overseas automaker performance is a series of practical problems: falling demand for fuel cars, lengthened investment return cycles for new energy vehicles, and severely insufficient capacity utilization rates for some factories and production lines.

Taking Nissan Sunderland Factory as an example, MarkLines statistical data shows that its actual operating rate in 2025 was only 45.5%, down 8.7 percentage points compared to 2023, and annual output was less than half of the designed capacity. At the same time, idle factories and production lines still need to bear rigid costs such as depreciation, labor, and maintenance, further increasing their financial burden.

Facing profit pressure, multiple overseas automakers are achieving cost reduction by closing factories and reducing capacity — which precisely provides a perfect opportunity for Chinese automakers' local layout.

Compared to the construction cycle of building a factory from scratch taking three to five years, acquiring or renting an existing factory can significantly compress the time for capacity landing. Chinese automakers can complete production layout with lower capital costs and time costs, thereby seizing the market opportunity.

The "retreat" of overseas automakers is, in a sense, becoming an accelerator for Chinese automakers' "advance".

III. Overseas sales surge, era of Chinese car grand navigation arrives

With the acceleration of automakers' local layout, the effectiveness of automakers' global layout is already reflected intuitively in overseas sales data.

Looking at the export sales performance in May, multiple Chinese automakers showed bright overseas sales performance in May 2026.

Three Chinese automotive groups broke through 100,000 units in export sales in May, with Chery Group exporting 182,000 units, up 81% year-on-year. BYD's overseas sales in May were 160,000 units, up 81% year-on-year, creating a new monthly record for overseas sales. SAIC Group exported 129,500 units in May, up 32% year-on-year.

Summary of export sales and total sales of some domestic automakers in May 2026

In addition, Geely and GAC's overseas sales doubled, exporting 85,000 units and 28,000 units in May respectively, up 184% and 140% year-on-year.

It can be seen that the monthly overseas sales of top automakers have stabilized at the hundred-thousand level or even reaching the two-hundred-thousand level, and going global is moving from "testing the waters" to "volume release" stage.

And looking at the cumulative export data performance in the first five months of this year, this growth trend is even clearer: overseas sales of six automakers — BYD, SAIC, Chery, Geely, Great Wall, and Changan — have all climbed.

Summary of export sales and export annual sales target achievement of some domestic automakers in the first five months of this year

Among them, Chery Group's cumulative export in the first five months of this year reached 753,000 units, up 70% year-on-year, a net increase of 309,000 units compared to the same period last year. Its increment ranks first among the six automakers.

During the same period, BYD followed closely with an increment of 243,000 units. Cumulative export in the first five months of this year reached 617,000 units, up 65% year-on-year.

The overseas sales target set by BYD at the beginning of this year is 1.5 million units for 2026. In the first five months of this year, 41% has been completed.

Recently, BYD Chairman Wang Chuanfu revealed at the annual shareholders' meeting that it is expected that overseas sales this year will exceed the original target, releasing a clear signal of acceleration in going global.

Geely's cumulative overseas sales reached 371,000 units in the first five months of this year, up 158% year-on-year. With the fastest growth rate among these 6 automakers, Geely's export sales target this year is 640,000 units, with 58% achieved in the first five months of this year.

SAIC, Changan, and Great Wall's export sales reached 589,000 units, 299,000 units, and 231,000 units respectively in the first five months of this year, up 46%, 21%, and 47% year-on-year. Growth is stable, with export annual sales targets achieved at 39%, 40%, and 39% respectively.

Whether single-month export sales or cumulative export sales, Chinese automakers' overseas sales show the characteristics of continuous, stable, and high growth.

It can be foreseen that in the second half of the year, the investment of major Chinese automakers in building factories overseas, channel expansion, and supply chain localization will continue to be increased, and the pace of going global will be further accelerated. Chinese cars are moving comprehensively from "product output" to "industrial rooting", and the competition of the era of grand navigation has just begun.

Conclusion: Chinese automakers accelerate overseas landing

From building factories overseas, acquiring factories to leasing production lines, Chinese automakers' local layout is blooming in multiple points and accelerating landing.

Those who can integrate overseas capacity in the fastest speed, integrate into regional supply chains, and seize local market shares will be able to occupy the initiative in the next stage of global competition.

This is not only a challenge, but also a necessary path for Chinese automobiles to go from large to strong.

From "complete vehicle export" to "technology output + local production", from "going out" to "going in", the curtain of the era of Chinese car grand navigation has been lifted, and the real journey has just begun.

At the beginning of June, all car companies announced their May sales data. Since entering the second quarter of 2026, sales for each brand have generally been steadily increasing.

It is still the familiar two giants, BYD and Geely. May sales figures were respectively383,453 units and237,637 units.But in my personal opinion, their export data is even more worth our attention.

First, looking at BYD's part, in May their passenger cars and pickupsold 160,177 units overseas, an increase of 80.7% year-on-year; cumulative sales from January to May reached 614,470 units.

Geely similarly performed excellently,May overseas export sales volume was 85,144 units, a year-on-year growth of 184%.

Actually, many readers should know, BYD's 'ATTO 3' which is the overseas version of the Yuan PLUS, and their pickup model 'BYD SHARK' sold quite well overseas.

But in fact, BYD sells more than just these products overseas, and BYD's big weapon 'Flash Charging Technology' is also still in the initial layout stage overseas.

They plan to scale up about 6,000 megawatt flash charging stations overseas by the end of 2026, simultaneously exporting flash charging models equipped with second-generation Blade Batteries.

As for Geely, their premium brand Zeekr has recently been shining overseas, not only is Zeekr 9X very popular in the Middle East market, but the video of 'Zeekr 8X Beating Ferrari' is also widely circulated on the foreign internet.

Including in some lower-tier markets, models like Emgrand, Xing Yuan are also opening up recognition, Chinese car exports can be said to be welcoming a new stage.

According to data released by CPCA,in 2025 China's car exports reached 8.32 million units, a year-on-year growth of 30%; new energy vehicle exports in 2025 totaled 3.43 million units, a year-on-year growth of 70%.

Time has come to 2026, January to March China's car exports reached 2.34 million units, year-on-year growth of 53% compared to the same period in 2025. Combining this data and the current situation, see,I think China's car export volume in 2026 is expected to break through 10 million units.

Everyone says the economy is bad now and no money to buy cars, so why are car companies constantly launching new cars? Yes, one important reason is that Chinese car export business is growing rapidly.

Although the domestic car market has already tended towards saturation, the overseas market is still very vast, and Chinese cars are very competitive.

From CPCA's Cui Dongshu's article we can see, Chinese cars are exported in large quantities to countries such as Russia, Brazil and Mexico, and like the UK, Belgium and Italy in Europe, are also important export regions for Chinese cars.

Besides new cars, exporting used cars is also a big trend.

Domestically, the penetration rate of new energy vehicles long exceeded 50%, but it is not so overseas. In recent one or two years, while domestic consumers use replacement subsidies to buy new cars, a large number of fuel cars flowed into the used car market.

But the market cannot timely digest this part of inventory, therefore many used car merchants chose to export some 'Global Models' with relatively good condition to overseas, especially Asian, African, and Latin American countries, they have a huge demand for such products.

It is not hard to see, in the long term in the future, Chinese car exports will be a very big trend. If friends are interested, they might try to enter this industry, maybe there will be good development prospects.

So how are the major car companies laying out? If friends pay attention to this side should know, new force car companies actually attach great importance to export business.

Take the familiar 'NIO, XPeng, and Li Auto' as an example, NIO had already laid out the overseas market as early as 2021, and also built charging swap stations in parts of Europe and the Middle East.

But NIO's current main focus is still on consolidating the domestic market. Indeed NIO just recently 'got better', there is not enough financial strength and energy to cope with overseas challenges, so NIO's going global speed slowed down in 2026.

But with the help of ES8 and ES9, NIO basically passed the most difficult moment. I think it is time for them to work harder on new car going overseas.A car like Firefly is very suitable for the European market, at the same time, it is already being sold overseas, I think more can be done with it.

And XPeng Motor, for example, 2025 delivered over 45,000 new cars overseas, business covering 60 countries and regions globally.

At the same time, they have also set up 3 production bases overseas, to cope with challenges in tariffs and manufacturing costs. As early as July 2025, the Indonesia base was completed and started production; September Graz, Austria factory started European localization production; December Malaysia base was also completed.

Even they set such a grand goal as 'achieving half of sales from overseas by 2033', believe XPeng has the opportunity and ability to complete it.

But among new force brands, the one with the biggest potential I think is still Leapmotor.

Nowadays Leapmotor in the domestic market can be said to be on a strong trend, continuously gaining the title of sales champion among new force car companies,and in the overseas market it relies on Stellantis Group's sales network, at extremely cost-effective prices achieved good results in the European market.

2025 Leapmotor export volume reached 67,052 units, and in 2026 I think this data is expected to improve further, after all, if they want to achieve the goal of 'millions of annual sales', overseas market naturally cannot be ignored.

Of course, there are also some new force car companies whose export business started relatively slowly.

For example, Li Auto officially started export business only in 2025, but their products were sold overseas via 'parallel export' very early, and also received good reviews.

For example, Xiaomi Motor which sold very well domestically, plans to start export business only in 2027, but according to Xiaomi Tech's layout and influence overseas, I think Xiaomi Motor also has the opportunity to sell hotly.

However, the continuous increase of Chinese car export volume is not entirely the credit of 'Chinese brands', many joint venture brands' models produced in China exported overseas also counts as Chinese car export.

This includes products produced by Tesla China factory, and models from brands under SAIC like MG, Chevrolet, etc.Some joint venture brands' products may not be welcome domestically, but placed in the overseas market that is a 'blockbuster'.

This also explains why some brands' presence domestically is not quite high, but when statistics sales data is not considered bad.

Overall, the increase in Chinese car export volume is very beneficial for promoting economic circulation, can promote the inflow of foreign exchange, provide support for reviving the economy.

And independent brand car companies should also attach more importance to export business, only then can they open up a larger market.So which car company is the biggest winner now? I think some readers should be able to guess, it is Chery Motor.

May 2026, Chery Group sold 247,823 cars, year-on-year increase of 20.5%. Among them, group new car exports were 181,871 units, year-on-year growth of 80.5%, and broke Chinese car single-month export record for three consecutive months.

In the full year of 2025, Chery Motor exported new cars totaling 1,344,020 units, a year-on-year growth of 17.4%; cumulative car exports 5.85 million units, ranked first in Chinese brand passenger car exports for 23 consecutive years.

Although I often criticize Chery's product sequence is chaotic, it is precisely the sufficiently rich product sequence that allows Chery to do well in different countries, plus early layout, let Chery Group become the unquestionable 'Chinese Brand Car Company Export No. 1'.

Nowadays the iteration speed of new cars has become incredibly fast, many friends might think 'Why are there so many people wanting to buy cars'? But after understanding this car export matter, everyone should have a new understanding.

Car companies releasing new cars is not just for the domestic market, it is also a layout for overseas business.

The domestic new car market indeed has already tended towards saturation, but if we look further and wider, from a global perspective, isn't the market very vast?

Everyone can perceive that now is no longer the period of economic upward trend, in the situation where the real estate industry has cooled down, we need a new pillar industry.

For the domestic market, the automotive consumption industry is the choice made by the 'Invisible Hand'. So in your opinion, will car export business be a new trend?

((The above content represents only personal opinion))

When the narrative of sheer scale in the Chinese New Energy Passenger Car Market is no longer persuasive, a more severe question arises: Where lies the value foundation of the industry?

Looking at the sales data for April alone, it seems everything is "growing upwards": The retail penetration rate of Chinese new energy vehicles historically broke through 60%, reaching 61.4%, meaning for every 10 new cars sold, more than 6 are new energy vehicles.

However, a set of less-than-ideal data echoed in the industry at the same time: In 2025, domestic car sales exceeded 34.4 million units, but the overall profit margin of China's automotive industry during the same period was only 4.1%.

"It looks like scale is growing, but the industry's overall health faces challenges." Wang Hui, Vice President of Avatr Technology, cited data from the CPCA, and in January-February 2026, this figure dropped further to 2.9%.

The latest data shared by Cui Dongshu, Secretary-General of the CPCA Passenger Car Section, shows that in January-March 2026, the automotive industry's profit margin fell to 3.2%, at a low level for the same period in recent years. The automotive industry's profit margin is not only significantly lower than the average profit margin of national industrial enterprises above designated size, but it is also approaching the break-even point for operations for the vast majority of vehicle manufacturers.

When a penetration rate of 61.4% collides with a profit margin of 2.9%, it forms a very fractured industrial landscape: China's automotive industry is speeding ahead on the road of "getting bigger", but is stumbling on the road of "getting stronger".

At the Shenzhen 2026 (4th) Future Automotive Pioneer Conference, these "pioneers" gave some answers and posed deeper questions.

Image Source: Future Automotive Pioneer Conference

Sales Are Rising, Profits Are Falling?

Since 2026, China's automotive market has presented a seemingly contradictory yet established picture.

On one hand, the surge of new energy vehicles is unstoppable. Data from the CPCA Passenger Car Section shows that in April 2026, domestic new energy passenger car retail reached 849,000 units, the penetration rate historically broke through 60%, reaching 61.4%, an increase of 9.7 percentage points compared to the same period in 2025, setting a historical record for monthly penetration in the domestic car market.

Among these, the performance of independent brands was particularly eye-catching. In April, the new energy penetration rate within independent brands reached 80.1%, while the new energy penetration rate among luxury vehicles was only 26.1%. Chinese brands already hold a dominant position in the new energy market.

On the other hand, profit margins for vehicle manufacturers are being compressed sharply. From 4.1% in 2025 to 2.9% in the first two months of 2026, this downward curve is concerning.

Just looking at the absolute value of profit, the total profit of the automotive industry in January-March 2026 was 78.4 billion yuan, a 18% year-over-year decrease. Facing this figure, Wang Hui's remarks at the conference appeared particularly sharp: "Sales without profit are fake sales; scale achieved through price wars is even more of a false prosperity."

Image Source: Future Automotive Pioneer Conference

"Selling more while losing more" has turned from a joke into a ruthless reality.

Investigating the reasons, large-scale "price wars" are undoubtedly the most direct catalyst.

Since 2025, the industry has seen the slogan "Electricity is cheaper than fuel", followed by various companies catching up. Lowering prices is no longer news. But the more fundamental problem is that when all car manufacturers have high convergence in technical routes and product configurations: 800V high-voltage platforms, AI voice large models, and end-to-end intelligent driving become standard configurations, price becomes the only differentiated competitive means, and profits are eroded layer by layer.

Xu Jun, Senior Vice President and Chief Operating Officer of Leapmotor, analyzed: "A range of 700 kilometers versus 1000 kilometers, user perception difference approaches zero, yet costs rise exponentially. Compute power from 30 TOPS to 1000 TOPS, experience difference is far smaller than parameters."

Image Source: Future Automotive Pioneer Conference

He therefore believes that specs so far are just a basic entry ticket, not the deciding factor.

Behind Xu Jun's viewpoint is a trend worth reflection: When automotive technology enters a "convergence period", the architecture of centralized computing + regional controllers is converging, end-to-end intelligent driving solutions are becoming identical, and AI solutions for smart cockpits are becoming increasingly similar, making it increasingly difficult to build differentiated competitiveness relying on technical parameters.

The weight of brand attention in user purchase decisions is rising significantly.

Nio Founder Li Bin revealed the latest research data from McKinsey: One or two years ago, brand was only ranked fifth among purchase decision factors, now it has jumped to second, "believes it will soon enter the top spot".

Image Source: Future Automotive Pioneer Conference

When brands begin to become the "deciding factor", China's automotive industry's technological dividend is quickly turning into brand dividends, while brand reconstruction and construction are far more difficult and test fortitude more than stacking parameters.

Who is Trying to Break the Negative Growth Curse?

Against the background of declining industry profit margins, not all enterprises have fallen into the mud of "revenue growth without profit growth".

At this conference, a few "dark horses" used solid data to prove a possibility: Chinese brands can not only sell at higher prices, but also make profits back.

Xing Xinchu, Chairman of Jianghuai Automobile Group, disclosed in his speech that since Maextro S800 launched in May 2025, cumulative deliveries have exceeded 18,500 units, ranking first in luxury sedan sales above 700,000 yuan for 8 consecutive months.

Image Source: Future Automotive Pioneer Conference

From the perspective of price segments, million-level Chinese luxury cars surpassing century-old luxury brands was almost unimaginable five years ago.

Xing Xinchu attributed this to the path choice of "redefining luxury with technology": "The Maextro brand is not simply copying the development path of traditional luxury cars, but rewriting the narrative paradigm of ultra-luxury car brands with technological innovation."

Nio represents another path worth examining.

On June 1st, Nio announced the latest delivery data: Deliveries in May totaled 37,705 units, a significant year-over-year increase of 62.3%, and a month-over-month increase of 28.4%, setting a new record for single-month deliveries in the brand's history.

The main brand "Nio" delivered 20,013 units, a 50.8% year-over-year increase; the brand "Onvo" positioning the family market performed particularly well, delivering 12,029 units, a 91.5% year-over-year surge, and a month-over-month increase of up to 124.8%; the new brand "Firefly" delivered 5,663 units, a 53.9% year-over-year increase.

From January to May this year, Nio's cumulative new car deliveries have reached 150,526 units, a 68.7% year-over-year increase. At this point, Nio's historical cumulative deliveries officially broke through the 1.14 million mark, reaching 1,148,118 units.

Regarding financial reports, in Q1 this year, Nio's total revenue was 25.53 billion yuan, a 112.2% year-over-year increase, exceeding the revenue guidance upper limit of 24.48 billion to 25.18 billion yuan previously given by the company; total gross profit was 4.86 billion yuan, a 428.4% year-over-year significant increase; the company's comprehensive gross margin reached 19.0%, the highest in four years. Vehicle gross margin was 18.8%, growing quarter-over-quarter for four consecutive quarters, also the highest in four years. Other sales gross margin was 20.6%, also the best level in four years.

Regarding net loss, Q1 net loss narrowed to 332.1 million yuan, significantly narrowing from the net loss of 6.75 billion yuan at the same period last year. As of the end of Q1, Nio's cash reserves increased to 48.2 billion yuan, achieving positive operating cash flow for three consecutive quarters.

In Q1 2026, Nio brand's average transaction price reached 390,000 yuan, 50,000 yuan higher than BMW and 130,000 yuan higher than Audi.

Behind this price difference is a qualitative change in brand premium capability.

No less coincidentally, data shows that the average transaction price of the HIMA全系 series vehicles has remained stable at 390,000 yuan, ranking first in the average transaction price of Chinese car brands for several consecutive months, with performance in some periods surpassing traditional luxury brands.

In segmented brands, the AITO brand's average transaction price reached as high as 409,000 yuan, flagship model AITO M9 cumulative deliveries exceeded 280,000 units, ranking first in 500,000-level luxury SUV sales for 21 consecutive months. The Maextro brand positioning the ultra-luxury market also performed strongly, the first model Maextro S800 price range 708,000 - 1,018,000 yuan, deliveries exceeded 17,000 units in 11 months since launch, ranking first in ultra-luxury sedans above 700,000 yuan for 8 consecutive months, single-month sales even exceeding the total sales of multiple traditional top luxury sedans.

Image Source: Future Automotive Pioneer Conference

The logic behind these brands rising against the trend in price wars is not accidental: First, deep understanding of user value rather than simple spec stacking, second, extreme investment in new technologies forming tech premiums, third, forming systemic capabilities in manufacturing, supply chain, and quality, fourth, deep synergy with partners like Huawei forming technological leadership.

However, analyzing the financial performance of the above brands more deeply, a thought-provoking question emerges: Will the existence of these high-price, high-profit brands change the trend of the automotive industry's profit margin overall?

The answer may not be optimistic. Although Maextro S800, Nio ES8/ES9, and AITO M9 have achieved impressive results in their respective price segments, their share of overall industry sales remains limited.

In other words, the "local breakthrough" of high-endization has not yet reversed the "overall predicament" of the entire industry.

For most independent brands, the average car price is still below 150,000 yuan, and the main battlefield of price wars continues intensely in the mid-to-low-end market.

When most players are still struggling at the loss line, a few successful high-end brands cannot support the entire industry's profitability level.

The true test of China's automotive industry moving "from big to strong" is not whether it can produce one or two products that can rival the Mercedes-Benz S-Class, but whether it can achieve high-quality value creation universally across all categories and price segments.

Mercedes-Benz Sales in China Dropped 27%, Can Chinese Cars Smile Overseas?

When the smoke of price wars rises and falls in the domestic market, the overseas market is becoming China's new "second battlefield" for the next round of competition.

At this conference, multiple guests elaborated in-depth on the strategic layout and direction of China's automotive globalization. If domestic competition is about fierce struggle in the existing stock market, then global competition is a long-term bet on the incremental market.

Avatr's globalization practice provides a highly representative sample.

Wang Hui disclosed in the speech that Avatr has entered more than 40 countries and regions. Avatr 11's starting price in China is about 290,000 yuan, but overseas it is close to 450,000 yuan.

"In Thailand, we firmly hold the #1 spot in luxury electric SUV sales, and in Dubai we occupy 10% of the local high-end electric vehicle market share." Wang Hui said, "At the end of this year, we will officially enter Europe. Although we have been in overseas markets for about a year and a half, we have already achieved stable profitability. So future globalization is something that must be done."

Wang Hui also revealed the brand strategy of sponsoring the Portugal national team in the interview session. He stated that Avatr's main products in Europe will fully enter Europe in November and December. He will go to Europe to communicate with partners in multiple countries. "Sponsoring the Portugal national team is just one of our actions at the Europe brand level. What we adhere to in Europe including globally is long-termism. Besides the brand side and product side, greater resource investment is in the service side, system side, and construction of operational capabilities."

Geely's globalization layout is more macroscopic and systematic.

Geely Automobile Group Vice President Li Chuanghai pointed out that the "most essential thing about China's automotive globalization is not low-price volume, but technology as the root, system as the foundation, brand as the soul, ultimately completing globalization from selling cars to defining the future of cars".

Image Source: Future Automotive Pioneer Conference

He introduced that Geely has operated globalization business for 20 years, owning 5 R&D centers, 16 test bases, with deep integration of local partners in Europe, Southeast Asia, Middle East, Latin America, and Eastern Europe. Geely has participated in co-building international standards and is the first Asian car manufacturer in IATF with board voting rights.

In the dimension of car exports, data from April 2026 also provides an important reference.

In April 2026, car exports reached 901,000 units, a 74.4% year-over-year increase, among which new energy vehicle exports increased by more than double year-over-year, reaching 430,000 units. The overseas market has become the most important incremental engine for China's automotive industry.

However, while export growth is gratifying, a comparative data worth examining is: In Q1 2026, Mercedes-Benz Group sales in China were 111,600 units, a 26.9% year-over-year decrease, becoming the region with the most significant decline among its major global markets. Meanwhile, financial reports showed Mercedes-Benz Q1 revenue was 31.602 billion euros, a 4.9% year-over-year decrease; net profit was 1.433 billion euros, a 17.2% decrease; global sales were 499,700 units, a 6% year-over-year decrease.

This set of numbers reflects both the challenges Mercedes-Benz encountered in the China market, and poses a question: When Chinese brands take root in the overseas market, in what posture will they face global competition?

Chinese cars are replicating the dilemma BBA faced in China's domestic market: When local brands continuously conquer territory through technological advantages and high cost-performance ratios, powerful international brands may also encounter strong counterattacks from local brands in other markets.

When Mercedes-Benz China Senior R&D Executive VP Drummond Jacoy was asked how he views China's new luxury brands, his answer was cautious yet with a hint of urgency: "China has many very excellent brands and products, I respect them very much. We are vigorously embracing technological innovation, continuously learning, and blending cutting-edge technology with brand accumulation."

Image Source: Future Automotive Pioneer Conference

He particularly emphasized that Mercedes-Benz has already carried out deep cooperation with Chinese tech companies in China, from ByteDance and Tencent to Momenta, from Amap to Spark, Mercedes-Benz is trying to narrow the intelligent technology gap with China's local enterprises in unprecedented ways.

This just reveals the new trend of global competition: The battlefield has expanded from China's domestic market to the global market, and the core focus of competition has evolved from single-product competition to all-round competition covering technology, ecosystem, supply chain, and brand.

In Li Chuanghai's words: "Going out is not difficult, standing firm, integrating, and taking root is the real skill."

True globalization is by no means simply copying domestic products and price models overseas, but achieving deep and comprehensive integration from capital to technology, from standards to supply chain.

Leapmotor's strategic layout also echoes this judgment. Leapmotor Founder Zhu Jiangming once publicly disclosed Leapmotor's globalization goals. Zhu Jiangming believes the first step is to achieve a "40-60 split", China accounting for 60%, overseas accounting for 40%; next, strive for a "50-50 split"; the most ideal state is "reverse 40-60". If China's automotive global share can achieve 40% domestic and 60% overseas, that is the best state of true globalization.

From "selling products" to "building systems", this is the threshold China's automotive globalization must cross. In the next three to five years, whoever can first form a viable and sustainable profit model in the overseas market will seize the initiative in the long-term race of globalization.

Conclusion: Car Manufacturers Must Make Money

Back to this conference's theme — "Climbing Steps".

China's automotive industry has completed a leap from catching up to leading in 20 years. There are no short cuts on this road, every step is trodden out. But today, China's automotive industry faces an awkward dilemma: Its achievements in volume have reached the peak, global largest car producer, global largest new energy market, globally leading intelligent technology cluster, but breakthroughs in quality are only just beginning to show signs in local areas.

Industry profit margins dropping through 3.2% means the red light for industry health has already lit up.

When most enterprises have exhausted profits in price wars, who will still have enough funds to invest in R&D for next-gen technology, brand reconstruction, and globalization expansion?

From Wang Hui's "Sales without profit are fake sales", to Xu Jun's "Everyone can lower prices, cutting costs is the real skill", to Li Chuanghai's "Keeping direction in the no-man's land", the most valuable consensus of this conference might just be this common sense as simple as it is: The competition of the automotive industry is a war of attrition, not a blitzkrieg.

As Xing Xinchu said: "On the road of breakthrough in high-endization of Chinese brands, there are no lone heroes, only symbiotic evolution."

When the penetration rate of 61.4% and the profit margin of 3.2% are written on this page of the industrial picture at the same time, the answer is already clear enough: China's automotive industry must move from pursuing "getting bigger" to a new stage of "getting stronger".

The issue is not whether it can sell cars to the million-level, but when the price war burns out the last bit of profit, whether the entire industry can still stand steadily on every step of "Climbing Steps".

May 28, 2026, the World Living Room of the North Bund in Shanghai. In the live broadcast lens of Dragon TV, there were no lengthy speeches by leaders, but rather a "Global Relay Delivery" spanning across Asia and Europe, connecting multiple cities globally.

SAIC Group welcomed its first 100 millionth global user, officially becoming the first automotive group in the history of China's automotive industry to accumulate production and sales exceeding 100 million vehicles.

15 brands, counting down from the 99,999,996th vehicle to the 100,000,012th vehicle, 18 models were delivered synchronously in Shanghai, Liuzhou, Anting, London, Jakarta, and Singapore.

This is not only a milestone for an enterprise, but also a vivid footnote to China's automotive industry developing from scratch and from weak to strong.

In May 2014, SAIC actively implemented the instruction that "developing new energy vehicles is the only path for China to move from a large automotive country to a strong automotive country" and fully transitioned to new energy.

Twelve years later, SAIC completed the transition from "leading the way" with early transformation to "thousands of horses galloping" with brands, technology, ecosystem, and global reach blossoming, all through this 100 million delivery.

If you tear off all those hollow PR words and focus on the diverse owner profiles at the car delivery ceremony, some even spanning extreme geographical regions, you will find that the true smart-electric mass production capability and systemic power of a big factory lie precisely in these votes by different circles using their feet.

True International Natives

True internationalization has never been about holding a temporary press conference overseas or inviting a few Chinese media outlets, but about your product truly integrating into the lives of ordinary overseas people. Among the military merit medals of SAIC's 100 million deliveries, cumulative overseas deliveries have exceeded 7 million units.

At the delivery site in London, intern doctor Natalia picked up an MG4 EV. For her, this is not just an urban commuter pure electric small car. Her growth path has always had MG company, and her grandfather drove a classic British convertible MGB back then.

MG represents a new chapter in the global expansion of Chinese automakers. This brand, once born in the UK and possessing a century of history, after being wholly owned by SAIC Group, has multiple years consecutively topped European sales among Chinese brands.

At the same time, in Jakarta, the core winger of the Indonesian National Men's Football Team, the "genius boy" Eg who studied in Europe for five years, chose Wuling's 7-seater SUV Eksion produced locally in Indonesia, perfectly adapting to Indonesian local spatial and comfort needs, as the travel partner for himself and his family.

Behind this global multi-time-zone, multi-city relay delivery is SAIC's deployment of over 100 parts bases, 3 R&D centers, and 4 overseas manufacturing centers overseas. Even to avoid being strangled by international logistics capacity, SAIC also formed a self-operated RoRo fleet with a scale of 41 ships covering routes globally.

This "Age of Discovery" throughput of "Glocal" local globalization allows overseas car buyers, when purchasing, not to buy a distant imported symbol, but a reliable product supported by a local R&D layout and a local systemic ecosystem.

Efficiency Tool for Wealth Creators.

Those focusing on new forces of car making in middle-class private cars will find it hard to understand why SAIC's delivery list would simultaneously include a large number of commercial light trucks, logistics vehicles, and buses.

In Singapore, DHL (Dunhuang) Senior Vice President Herbert picked up a batch of MAXUS eDeliver 5 pure electric light trucks to cope with high-density, high-frequency urban last-mile delivery and cross-border parcel transfer;

In Taiyuan, Shanxi, Henglongsheng Industrial and Trade General Manager Zhang Yanbin purchased 56 Hongyan new energy heavy trucks again, working frequently in the most severe and labor-demanding mixing stations and urban infrastructure projects;

In Yangzhou, Jiangsu, Top Land Senior Vice President Yuan Guo batch-delivered nearly 10,000 Feifeng Dana T1 pure electric light trucks;

In Henan, Zhonglian Tourist Automobile General Manager Wang Xiaobing purchased Iveco Joy Star EV in one breath, used to run the high-density mountain road custom shuttle route from Luoyang to Laojun Mountain.

When the car circle is flocking to compete in TVs, refrigerators, and big sofas, these strivers walking on the front lines of infrastructure, culture, tourism, and logistics care most about availability rate, quality bottom line, and energy consumption cost. MAXUS light trucks can reduce cost per kilometer to as low as 5 cents under the city distribution model; Hongyan new energy can withstand extreme working conditions in mountainous slope operation environments.

This is the counter-cyclical structural advantage possessed only by big factories with "Full Scenario, Full Category Coverage". The essence of systemic power is that it can not only build the IM LS9 Hyper to fly close to the ground for the elite class at the 300,000 yuan level luxury electric car, but also build the smart electric tool car running in the urban logistics backbone network to help ordinary people efficiently create wealth.

Without a doubt, such a three-dimensional product matrix cannot be bought for even a lot of money by single-track lane players.

Reject High-Price Monopoly

Frontier smart-electric technology should not just be exclusive high-price toys for the rich.

In this delivery, the most touching story comes from Pang Fuqiang, a post-80s village party secretary in Lantian, Shaanxi. He personally pays every day to provide door-to-door meal delivery service costing 2 yuan per meal for 74 left-behind elderly people in the mountains. Because the delivery routes are scattered and road conditions are dispersed, the tricycle he drove before had small loading capacity and no safety guarantee.

In this activity, he was gifted a Wuling Rongguang Pure Electric Version. The 4.3 cubic meter large space, Shenyan Battery Commercial Version, and collision zero spontaneous combustion safety record became his helper to protect mountain elderly more quickly and safely.

And in Dahua Yao Autonomous County, Hechi, Guangxi, charity blogger Liu Jia drove back and forth through towering mountains for five consecutive years rain or shine to give haircuts and companionship to left-behind children. The Buick ZhiJing E7 he picked up, equipped with eye-protection ceiling lights and zero formaldehyde cabins, became the "full score cabin" for the children in the mountains.

Why can ordinary people and grassroots strivers enjoy the most cutting-edge and reliable technology?

The answer is still the scale effect and technology mass production brought by the system.

Because SAIC owns a full technology route, full price range product layout, it can use the integration capability of the supply chain to smash the Qualcomm 8155 chip and Doubao Deep Thinking Large Model into the 60,000 yuan national family sedan Roewe i6;

Turn Huawei Qiankun Intelligent Driving Pro and HarmonyOS Cockpit into standard configuration across the line for the 150,000 yuan Wuling Huajing S, directly breaking the strong binding between high-level intelligence and high price.

Quickly realize mass production of top technology in the laboratory, downgrade, turn into a delivery car in the mountains, turn into a smart vehicle not lagging in a tens-of-thousands yuan fuel car, let technology empowerment, this is the unique, cutting-edge underlying hard power of car company big factories.

99,999,999th Car Owner

The 99,999,999th vehicle delivered by SAIC Group globally is the SAIC Volkswagen ID. ERA 9X.

This delivery also welcomed the 6,999th car owner of ID. ERA 9X. As the World Cup is about to start, the first Chinese player to fight in the Bundesliga, Yang Chen, became the 6,999th owner of ID. ERA 9X, jointly witnessing SAIC Group's cumulative production and sales entering the "100 Million Level Era".

Deeply integrating "German heritage + Chinese wisdom", ID. ERA 9X broke 10,000 locked orders within 1 hour of launch, and retail delivery reached 2,326 units just 5 days after launch, and in April it forcefully ranked in the top 3 of extended-range large high-end SUVs.

Now, just one month after launch, cumulative delivery exceeded 7,000 vehicles, further confirming its user recognition and product competitiveness in the high-end extended-range market. This achievement stems from SAIC Volkswagen's 42 years of deep cultivation in the Chinese market, and is more the fusion empowerment of the "In China, For China" strategy and "Global Wisdom + Chinese Speed".

This milestone delivery is both an important node for SAIC Group to move towards 100 million global cumulative production and sales, and a solid mark of SAIC Volkswagen's deep cultivation in the new energy track.

"100 Million Units" Is Not a Solo Act

"100 Million Units" has never been a solo act for SAIC alone, but the result of these 100 million car owners with vastly different identities, located in different time zones, voting with their feet on their respective life tracks.

Cao Xudong, CEO of a top intelligent driving enterprise, picking up the IM LS9 Hyper in Shanghai, stepping on the gas pedal in London streets by British intern doctor Natalia, the passenger car driver picking up waves of tourists at Luoyang scenic spots, and village party secretary Pang Fuqiang driving an electric car in the mountains of Lantian, Shaanxi to deliver meals for left-behind elderly...

They have different professions, skin colors, and budgets, but what they experience in intelligence, quality, and peace of mind at the moment they buy the car keys, shares at the bottom level, is the same huge, cutting-edge, and omnipresent smart electric big factory mass production system.

100 million vehicles is not the end point, but the starting line for this big factory smart electric mass production beast to accelerate transformation into a user-centric high-tech company. The system story of Chinese intelligence, in this global relay delivery season, has just turned a new chapter.

With the comprehensive deepening of electrification and intelligence, mainstream automotive supply chain companies are beginning to step from behind the scenes to the forefront, achieving role transition in the process of major changes in the automotive industry and reconstruction of the automotive ecosystem, rather than being limited to suppliers of car companies in the past. The underlying logic of their "rise" is to leverage the new tracks of electrification and intelligence to achieve a paradigm shift in technology, reach a technology premium, become joint definers and equal participants of the underlying technology stack of new cars with automakers, and thus achieve a brand premium, with influence directly reaching the consumer end. Automotive supply chain companies are welcoming a strategic development opportunity for comprehensive advancement.

Aiming at the advancement of supply chain companies, "Auto Panorama" specially produced this issue's "Cover Story" special report.

Currently, the new energy industry stands at a new historical node. In this historical process where the energy revolution and the technological revolution intersect, and reality and the future overlap, CATL has always been answering a question with action: How to build deterministic long-term value in an uncertain world?

CATL's financial report shows that its revenue in 2025 reached a high of 423.702 billion yuan, with net profit of 72.201 billion yuan, and global market share reached 39.2%. It has ranked first globally in power battery usage for 9 consecutive years. Of note, this supply chain company located upstream of vehicle manufacturing saw its net profit last year exceed the total profit of 13 mainstream listed automakers. The joke that "car companies work for King Ning" seems to have come into reality.

Behind this phenomenon lies CATL's influence on mainstream automakers globally. And the starting point of all this is the core status of power batteries in the new energy vehicle industry—power batteries account for about 40% of the cost of the entire vehicle and are undoubtedly the "heart" of new energy vehicles. For automakers, stable and reliable battery supply has long evolved from a basic guaranteed demand into a core strategic demand concerning product competitiveness and long-term development; for CATL, how to transform "top customers" into "strategic allies" is also a key issue determining the ceiling of its business landscape.

So, how did CATL "bind" nearly half of the automotive industry single-handedly? The reason lies in the fact that from a power battery supplier to a full-domain energy ecosystem service provider, CATL has built a deep binding system covering capital, production capacity, R&D, supply guarantee, ecosystem, and more over more than ten years. It is this system that firmly incorporates mainstream global automakers into its own industrial landscape, realizing a leap from "selling batteries" to "setting standards, building ecosystems," and thoroughly reshaping the relationship between supply chain companies and automakers.

Capital Binding

In the wave of electrification reconstructing the automotive industry, CATL jumped out of the traditional supplier's single model of "supply and collect money," using diverse capital means such as direct investment, strategic equity participation, and joint venture holding to deeply penetrate the equity structure of automakers, upgrading the supply-demand relationship into a community of interest and a strategic symbiosis, achieving all-round binding from the levels of funds, discourse power, and resources, and solidifying the foundation of industrial discourse power.

According to incomplete statistics, as of the end of May 2026, the number of new energy automakers invested in by CATL through direct or indirect means has exceeded 10. The latest move was on May 25, 2026, when Seres Group announced that its subsidiary Chongqing Luedian Technology Co., Ltd. received capital increase totaling 6.671 billion yuan from five investors. In the investor list, Ningbo Meishan Bonded Port Area Wending Investment Co., Ltd. (hereinafter referred to as "Wending Investment") ranked third with an investment amount of 984 million yuan and a shareholding ratio of 9.878%. This Wending Investment is a subsidiary wholly held by CATL.

Earlier, on May 12, 2026, the high-end intelligent new energy vehicle brand Qijing Auto jointly created by GAC Group and Huawei Qiankun announced that it had completed a strategic capital increase of more than 1 billion yuan, invested by CATL, investment platforms under Bosch, and capital of state-owned enterprises and central SOEs. It is understood that CATL's investment this time was also realized through paid-in capital of 300 million yuan via the wholly held Wending Investment, making it the single largest investor.

In fact, CATL's investment landscape extends far beyond these. In the new energy circle, "King Ning" is not just a battery seller, but more like a super player holding a capital map and "setting up circles" everywhere. In 2021, CATL invested heavily 770 million yuan to become the second largest shareholder of Avatr with a shareholding ratio of 23.99%, forming the unique CHN (Changan + Huawei + CATL) model at the time. As a return, Avatr not only featured CATL batteries as standard across all models but also globally launched CATL's Pangshi skateboard chassis for the first time.

In addition, CATL is also an early investor of Zeekr Auto, participating in Zeekr's Pre-A financing round. CATL not only holds about 2.97% of Chery through Wending Investment, but both sides also established the "Times Chery" joint venture company with a registered capital of 2 billion yuan. SAIC and CATL have actually been old partners for a long time. CATL holds about 0.48% of IM Motors, which is under SAIC. In BAIC Motor's financing of more than 8 billion yuan at the end of 2024, CATL invested 200 million yuan to become a shareholder.

In the commercial vehicle sector, in March 2026, Puquan Capital under CATL led the investment of 1.2 billion yuan in Lingyi Auto. In November 2025, FAW Jiefang announced a capital increase of 191 million yuan for the joint venture "Jiefang Times," and CATL invested simultaneously. The three parties invested a total of 412 million yuan. This joint venture company, established in 2023 with 50% shareholding each by FAW Jiefang and CATL, is just a microcosm of CATL's deep binding of automakers through capital ties in recent years.

In overseas markets, CATL also adopts the joint venture participation logic. On December 10, 2024, CATL and Stellantis each hold 50%, investing 4.1 billion euros to build a large-scale Lithium Iron Phosphate battery factory in Zaragoza, Spain. Products are exclusively for Stellantis' European models. Capital binding helps CATL deeply penetrate mainstream overseas automakers.

Of course, CATL has also hit snags when investing in automakers. For example, CATL once held about 2.67% of Neta Auto shares and invested in Aiways Auto early on. However, looking at the current situation, these two EV startups have basically exited the market.

CATL's capital binding is by no means simple financial investment, but a strategic layout to reconstruct the OEM-Supplier relationship and control industrial discourse power. This capital network model allows CATL to upgrade from a simple battery supplier to a strategic partner and community of interest for automakers, firmly grasping industrial leadership in the electrification wave, laying a solid capital foundation for all-round binding in technology, capacity, ecosystem, and other fields.

Production Capacity Lock-in

If capital is the skeleton of ties, then capacity is the flesh and blood. In the industry environment of cyclical tightness in battery supply and demand and intensified raw material price volatility, stable capacity is core competitiveness. CATL's capacity binding strategy can be summarized in one sentence: Build battery capacity where it is most needed—super factories next to automakers, or even directly built in customers' workshops. CATL provides deterministic capacity guarantees for cooperating automakers through three models: exclusive production lines, factory-in-factory, and regional bases, achieving deep binding through "capacity lock-in."

On June 30, 2025, CATL's two CTP 2.0 high-end battery pack production lines officially went into production at Seres Super Factory. This is the first time CATL cooperated with an automaker using the "Factory within a Factory" model to supply battery systems for local production of the AITO series models. The "Factory within a Factory" model is an innovative supply chain synergy model. CATL directly built battery production lines inside Seres Super Factory, achieving efficient closed-loop management from battery production to vehicle assembly. Batteries achieve "produce and install immediately," saving intermediate links such as packaging, transportation, and warehousing, shortening supply chain response speed to the 20-minute level.

If the "Factory within a Factory" is just a trial run of an innovative model, then the power battery joint venture companies widely established by CATL with mainstream automakers such as SAIC, GAC, FAW, Dongfeng, Geely, and Changan, such as Times SAIC, Times GAC, Times Geely, and Times Changan, usually hold controlling rights with 51% shareholding. As early as 2017, CATL cooperated with SAIC Group to establish "Times SAIC Power Battery Co., Ltd.," with a total investment of more than 10 billion yuan. This forward-looking layout allowed SAIC to fully reap dividends in the subsequent new energy transformation wave. When other competitors were queuing in front of CATL's headquarters to grab batteries, SAIC could steadily obtain battery packs meeting their customized needs through the exclusive production line of Times SAIC.

On February 13, 2026, Times Chery (Hefei) New Energy Technology Co., Ltd. was officially established, with registered capital of up to 2 billion yuan, held by CATL, Chery Automobile, and Chery Commercial Vehicle (Anhui) Co., Ltd. CATL holds 51%, while the latter two hold 49% in total. According to the agreement, Chery will obtain supply rights for CATL's core products such as Qilin Batteries and Sodium-ion Batteries first, while CATL will promote the application of innovative technologies such as semi-solid-state batteries and battery swap models in Chery's high-end models through technology licensing and joint R&D.

In factories laid out in Germany, Hungary, Indonesia, and other overseas locations, CATL has also achieved "wherever the vehicle is, the battery capacity is there." For international automakers such as Tesla, Volkswagen, and BMW, the European base is configured nearby; for automakers going global like Chery, Geely, and Leapmotor, the Southeast Asian base follows synchronously. Regional capacity layout effectively avoids trade barriers, logistics risks, and exchange rate fluctuations, ensuring automakers always have stable battery guarantees in global market expansion.

The underlying logic of capacity lock-in is using deterministic supply to counter uncertain cycles. For automakers, CATL's capacity guarantee means new cars do not get "choked" at launch, peak season delivery does not run out of stock, and overseas expansion has no worries; for CATL, locking capacity means locking sales, improving capacity utilization, dampening investment costs, and forming scale effects and cost advantages.

R&D Front-loading

If capacity lock-in binds the present, then R&D front-loading binds the future. Traditional battery supply follows a posterior adaptation mode of "automaker raises demand, battery factory makes products," while CATL has completely front-loaded R&D, achieving synchronized development, joint definition, and joint testing of vehicles and batteries, shifting from passive adaptation to active co-creation, realizing binding through deep technology embedding.

On December 17, 2025, CATL signed a 10-year deepened cooperation agreement with Voyah Auto. According to the agreement, CATL will actively cooperate with Voyah's new model development, prioritize providing leading battery technology, and comprehensively promote the scale application of benchmark battery brands such as Qilin, Shenxing, and Xiaoyao on Voyah models. This means Voyah's product planning will stay synchronized with cutting-edge innovation in the battery field. The cooperation vision between the two parties has expanded from a single power unit to new fields such as battery swap models, CIIC Intelligent Chassis Integration, Pangshi Chassis, and V2G representing future mobility ecosystems.

Of course, CATL's R&D front-loading logic is not limited to just this automaker. On November 11, 2025, CATL signed a 10-year comprehensive strategic cooperation agreement with GAC Group. Both sides will carry out joint R&D in cutting-edge fields such as intelligent chassis and battery swap ecosystems, and based on CATL's deep accumulation in power batteries, energy storage systems, and energy service fields, jointly create new energy vehicles with stronger market competitiveness. Regarding GAC Trumpchi's model planning, both sides are actively promoting the application of Pangshi Chassis technology.

Since 2025, CATL has reached cooperation with many automakers—not only GAC Group and JAC Group, but also core customers like Li Auto and Seres. Battery manufacturers and automakers are stepping over traditional buying and selling games towards a new stage of deep binding and value co-creation. CATL's R&D system has thereby become more "forward-looking": When the next generation of battery technology is still iterating in the laboratory, CATL has already been planning future vehicle platform architectures with partners.

The deep significance of R&D front-loading lies in making CATL transform from a supplier passively responding to demand into a standard setter proactively defining future technology routes. The Qilin Condensed Battery released by CATL on February 26, 2026, with an energy density of 500Wh/kg, is planned to be equipped for the first batch on NIO ET9 and Zeekr 001 FR at the end of the year. These technology explorations, which are still among the forefront in the industry, are becoming the strongest glue for CATL to bind high-end customers.

Ecosystem Co-construction

In fact, CATL's business field extends far beyond batteries. It is extending electrification goals to broader fields such as low-altitude aviation, ships, and data centers, rapidly expanding battery swap networks and services, promoting zero-carbon ecosystem construction, improving the industrial ecosystem, and extending the value chain. Around automakers, CATL is building an all-domain ecosystem of battery swaps, energy storage, charging, green power, and recycling, achieving irreplaceable binding through ecological barriers.

In the battery swap field, CATL takes Chocolate Battery Swap and Qiji Heavy Truck Battery Swap as the core, working with Changan, Chery, GAC, Seres, SAIC-GM-Wuling, BAIC, and others to form a Super Swap Shared Network, jointly building swap stations, sharing swap blocks, and unifying interface standards. On April 25, 2026, Chery Automobile, Chery Green Energy, CATL, and Times Energy Service signed a strategic cooperation agreement. All parties will focus on the layout of "Super Charging + Battery Swap" shared networks and green energy ecosystem co-construction. Chery Automobile will comprehensively import the Chocolate Battery Swap system of CATL and Times Energy Service. CATL's cooperation with GAC Group is even more all-round. It covers not only key fields such as intelligent chassis application, joint R&D of battery technology, battery swap ecosystem co-construction, and electrified platform innovation, but will also carry out long-term deep cooperation in business fields such as battery leasing and joint station building.

Zero Carbon Parks are projects CATL is vigorously promoting. Currently, zero carbon parks have been laid out in Dongying, Shandong, Xiamen, Fujian, Datong, Shanxi, Yancheng, Jiangsu, Hainan, and other places. They create green smart manufacturing bases through 100% green power direct connection and Source-Grid-Load-Storage integration technology. On July 26, 2025, the first national 100% green power direct-connected zero carbon industrial park led by CATL started construction in Dongying, Shandong. The total investment exceeds 10 billion yuan. The project adopts "Wind-Solar Coupling + Grid-forming Technology" to build an independent energy system, directly connecting wind power, photovoltaic generation, and energy storage systems to the factory. CATL's ultimate goal is to create a panoramic, integrated zero-carbon solution including green power direct supply, zero carbon parks, source-grid-load-storage, and grid-forming energy storage.

Used battery recycling is the last puzzle piece to achieve closed-loop management of the battery full lifecycle. Through recycling methods, CATL processes, purifies, and synthesizes metal materials such as nickel, cobalt, and manganese in used batteries, and recycles collected metal materials such as copper and aluminum through third-party recycling, realizing effective circular utilization of key metal resources needed for battery production. CATL has built a complete closed loop of "Production - Use - Cascade - Recycling," providing battery recycling, cascade utilization, and recycled material closed-loop services for cooperating automakers. Through scaled recycling and regeneration, raw material costs are reduced, feeding back into the price competitiveness of vehicle batteries, forming full-chain value sharing.

In addition, in overseas markets, CATL promotes vehicle-battery integration joint global expansion with Chery, Yutong, Geely, Dongfeng, etc. Overseas battery bases follow the rhythm of vehicle global expansion, providing global warranty, local services, supply chain support, and other services. Automakers going global no longer face battery adaptation, certification, and supply difficulties. CATL expands its global share following automakers going global, forming a globalized ecosystem binding.

The strategic significance of ecosystem co-construction far exceeds commercial cooperation itself. When CATL not only masters battery manufacturing but also controls battery swap networks, Battery Passport data (CATL cooperated with BMW in February 2026 to carry out an EU "Battery Passport" cross-border data pilot), and battery recycling full lifecycle management, it changes from a supplier simply providing parts into an infrastructure platform for the entire new energy mobility ecosystem. Automakers still play the role of building cars in this ecosystem, but key dimensions such as energy replenishment solutions, battery management, data services, and even user travel experience will be included in CATL's ecosystem system. This ecological-level binding far exceeds the product and price levels, forming a true "community of shared future."

The international energy situation continues to fluctuate, oil prices continue to rise, prompting Europeans to accept electric vehicles, and giving Chinese new energy vehicle brands new hope in Europe. According to foreign media reports, in April 2026, overall sales of Chinese automakers in the European market increased by 114% year-on-year, with SAIC Motor, BYD, and Chery emerging as the big winners.

While products are selling well, facing EU trade barriers and the global reality of excess capacity, Chinese top new and old automakers are also accelerating the layout of overseas production bases, landing localized production by acquiring and renovating idle capacity of traditional automakers in the US and Europe.

From export to sales to production, Chinese new energy vehicle brands going global are accelerating their advancement, expected to enter a new stage of reshaping the European automotive industry landscape.

SAIC Steady, Chery Aggressive, Chinese Cars Selling Big in Europe

On May 22, 2026, European automotive media cited the latest data from local market research firm Dataforce, stating April overall new car sales in Europe continued to recover, up 6.4% year-on-year, with the regional car market maintaining a steady recovery trend overall.

Due to the ongoing conflict in the Middle East, European oil prices have risen by about 20% since 2026, therefore, new energy models became the core driver pulling April growth in the European car market. Among them, pure electric vehicles performed the most prominently, with April sales increasing by 38% year-on-year, setting the highest single-month growth rate since 2026; Plug-in hybrid vehicle sales growth was 21%, and Hybrid vehicle sales growth also reached 15%.

European car users are accelerating their shift to new energy vehicles, which also created a perfect growth opportunity for Chinese car brands to accelerate expanding sales in the European market.

Data shows, in April 2026, overall sales of Chinese automakers in the European market doubled, surging 114% year-on-year. Among them, SAIC Motor sales in April were 30,074 vehicles, stably at the top of the Chinese automaker sales list, BYD single month sales were 28,186 vehicles ranking second, Chery April sales were 25,656 vehicles, ranking third. From a single-month performance perspective, the sales gap between the three Chinese automakers in the European market is also continuously narrowing.

In terms of sales growth rate, April European car market growth rate list was almost dominated by Chinese brands, Leapmotor growth rate was as high as 423%, Chery and BYD followed with year-on-year growth rates of 344% and 125% respectively, overall growth momentum was strong.

Among them, Chery became the Chinese automaker with the strongest growth explosiveness in the European market in April. Compared to April 2025, Chery sales increased by nearly 20,000 vehicles. Dataforce data shows, Chery brand April 2025 sales in Europe were only 4 vehicles, this April reached 5,446 vehicles; In addition, two sub-brands under Chery, Omoda and Jaecoo, both exerted force synchronously, all ranked in the forefront of European market sales growth, among them, Omoda growth ranked third in Europe, Jaecoo ranked sixth. Terminal market performance indicates Chery's layout in Europe has entered a stage of full-force exertion.

Because contrasting sharply with the high growth of Chinese brands is that some European local automakers and traditional car giants encountered sales decline in April. For example, Toyota dipped slightly 1% year-on-year, Renault declined 3%, Ford fell 11%, Hyundai decline reached 12%, Premium brand Porsche also surprisingly declined year-on-year to 17%, Mitsubishi decline was most prominent, reaching 51%.

European local giant Stellantis, which maintains close relations with Chinese automakers Leapmotor and Dongfeng, April sales achieved 4.3% year-on-year growth, but growth rate was lower than the overall European car market performance. Brand performance division within the group was significant, Leapmotor, Fiat, Opel/Vauxhall, Citroen maintained positive sales growth, while Peugeot and Alfa Romeo showed obvious sales decline.

If Chinese new energy vehicle new and old brands can continue this upward momentum, they will be expected to reshape the European market competition landscape.

Chinese Automakers on a Crazy Buying Spree, But Still Must Clear Union Hurdles

On one hand, multiple factors such as oil price hikes and new energy vehicle market transition overlap, leading to weak sales of traditional car giants in the European market. On the other hand, the manufacturing system left over from the fuel vehicle era is also gradually falling into the dilemma of idleness or excess capacity.

Consulting agencies predict, large numbers of low-utilization car factories in the US and Europe will face shutdown or transfer in the future, and the EU's measure of imposing additional import tariffs on Chinese electric vehicles, will further promote Chinese automakers to accelerate the layout of European localized production.

In this context, taking over and renovating traditional automaker factories has become a core method for many Chinese automakers laying out overseas localized production. This phenomenon has also attracted foreign media attention, recently a European automotive media reported that BYD is currently negotiating with Stellantis and other European automakers to take over idle factories in the region. In fact, BYD announced building a factory in Hungary as early as the end of 2023, becoming the first Chinese automaker to build a passenger car factory in the EU.

BYD Hungary factory planned annual capacity is 300,000 vehicles, in 2025 BYD sales in the European market exceeded 187,000 vehicles, year-on-year increase of over 260% compared to 2024. Predicting according to the growth rate, BYD relying solely on one Hungary factory will be difficult to satisfy car sales needs in Europe, therefore rumors about negotiating factory purchase with local car makers are reasonable.

Chinese automakers full of ambition for the European market are not just BYD. Just in one month of May 2026, news has spread about multiple Chinese automakers negotiating European capacity cooperation projects. For example, on May 20, Stellantis Group announced cooperation negotiation with Dongfeng Group, planning to rely on France Rennes factory to achieve local production of Dongfeng new energy models. In addition, Leapmotor also revealed that Leapmotor International established as a joint venture with Stellantis, is expected to acquire Stellantis factory located in Madrid, Spain, quickly build a European local production base.

There is also news that Geely is also actively accelerating the acquisition of Ford Spain Valencia factory partial assembly production line; Xpeng was also exposed to be negotiating with Volkswagen Group, seeking to acquire its European idle capacity. There is also Chery cooperating with Spain Ebro Group to activate former Nissan old factory, currently production has been resumed, Chery models are about to be imported and landed.

Taking over and renovating European automakers' idle capacity, the benefit is avoiding industry duplicate construction, increase local European employment opportunities, conforming to industrial policy orientation, also can save more time and improve efficiency compared to completely self-building factories.

However, what needs to be reminded to Chinese automakers is, buying spree does not mean permanent security, behind it also hides great risks.

Also recently, after news spread about Volkswagen Group and Xpeng negotiating idle capacity sales, Volkswagen Group union head (Daniela Cavallo) stood before tens of thousands of workers, heatedly criticized group management, and strongly opposed management negotiating with Chinese automakers etc. third parties to yield idle capacity.

Under this pressure, Volkswagen Group CEO (Oliver Blume) publicly stated, currently, Volkswagen has not had any negotiations with Chinese manufacturers regarding using European factory capacity, in the future there are absolutely no related cooperation plans.

Compared to emerging markets such as Southeast Asia, Middle East, Africa with high inclusivity to Chinese automakers, mature European car market regulations, unions, environmental protection, employment commitments etc. constraints conditions are more severe, Chinese automakers landing localization through the method of acquiring factories, besides renovating production lines, adapting supply chains, more need to adapt to local rules, adapt to local culture to survive better.

Of course, self-built factories can fully fit the automaker's own manufacturing standards, supply chain systems, and production concepts, autonomy control is stronger, but this also suits fund-adequate, layout pace controllable automakers to go for long-term layout. From this level, currently BYD's capacity layout in Europe fits long-term + short-term coordination better, globally, besides negotiating qualified old factories in major markets for renovation, BYD has landed at least 4 self-built complete vehicle factories in places like Thailand, Hungary, Turkey.

European new energy vehicle sales significantly increased, brought development opportunities to Chinese automakers eager to go global, however European complex emotions on Chinese automaker acquiring factories, again makes Chinese automakers' Europe road full of difficulties. Actually, this round of global automotive capacity restructuring led by Chinese automakers, reflects structural transfer of industry discourse power in the new energy vehicle era.

Fuel vehicle era, US/EU/Japan/Korea automakers dominated global car technical routes, capacity configuration and industry rules, under the wave of smart electrification, relying on complete new energy supply chain, mature three-electric and intelligent technology, efficient capacity system, Chinese automakers are upgrading from product export to full-scale overseas presence of capacity, technology, standards, expected to reshape the European and even global automotive industry landscape.

(Source: autonews.com, reuters.com, bloomberg.com)

That's right, China's first automaker to accumulate production and sales volume exceeding100 millionhas been born.

What does 100 million mean? If you built 1,000 units daily, it would take over 270 years. SAIC started from a small internal combustion engine parts factory in 1955, and it took 71 years to build this milestone.

In 1958, workers hammered out the first "Phoenix" sedan. Back then, not to mention intelligence, even air conditioning was a luxury.

What happened later? 1983 Santana manual assembly rolled off the line, opening the joint venture era; 1997 Shanghai GM built a factory and produced cars in 23 months, called "Shanghai Speed"; 2006 Roewe born; 2016 Roewe RX5 shouted "World's First Internet Car"; 2020 IM entered the high-end intelligent electric vehicle segment...

To be honest, SAIC's over 70 years is a microcosm of the Chinese automotive industry going from "knowing nothing" to "competing head-on."

And the thing I admire most is SAIC always has a slogan —"Understand Cars, Understand You Better".

Many think this is marketing talk, but look at what they do: early on, joint venture with global giants to build the supply chain system; in the intelligent-electrified era, deep synergy with domestic tech partners to push Large AI Models, Solid-state Batteries, and Full Wire-control Chassis onto cars.Understanding cars is hard tech; understanding you is turning hard tech into functions you enjoy using.

100 million cars is not just a number, it is100 million trusts. This is worth more than any parameter.

The 100 millionth unit is the IM LS9 Hyper, this car has some things

The first 100 millionth car delivered this time, is not Santana, not Wuling Hongguang, butIM LS9 Hyper.

I'll get straight to the point: Full Wire-control Four-Wheel Steering, 520-line LiDAR, Nvidia Thor Chip, Full-domain 800V, Star Super Extended Range... Take this config sheet out, any single one could be bragged about for half a year. It also first equips "SAIC Gold Label Hurricane Three-Motor", directly into the3-second Club.

Even more fierce, it collaborated with Purple Mountain Laboratories to develop "Intrinsic Security" technology, expanding safety from the physical level to the information and system level. Put simply,In the AI era, cars aren't just afraid of crashes, they're afraid of hacks. IM sealed this defense line solid.

Who is the 100 millionth owner?Momenta CEO Cao Xudong.

This is no coincidence. Momenta is SAIC's core intelligent driving partner, deep co-creation between both parties.Partners Become Owners, this delivery carries much more weight than a standard car handover ceremony — this is not a transaction, it is ecosystem resonance.

Behind 100 million cars is SAIC's"Full Suite" no one can copy

Don't think 100 million cars was achieved by one car. SAIC holdsSix Major Sectors: Vehicle, Parts, Mobility Services, Finance, International Operations, Innovation Tech. Full-chain closed loop, from R&D to selling cars to going overseas, they can even run the loop with themselves.

January-April this year, SAIC sold 1.302 million units, ranking first in China for four consecutive months. Among them, independent brands accounted forNearly 70%, New Energy 412,000 units, Overseas 459,000 units, up 50.2% year-on-year.

High Independent Share, Strong New Energy, Fast Overseas Expansion— with these three indicators shining simultaneously, across the domestic market, few can do it.

Look at the delivery site family photo: Independent brands have Shangjie Z7, Huajing S, Roewe M7, MG4 Semi-Solid State Battery version, Wuling Starlight 560... Commercial vehicles from Maxus to Hongyan to Sunwin, cover personal mobility, logistics transport, urban public transit completely.

Joint venture side is not giving in for nothing. Volkswagen ID. ERA 9X launched one month delivered 7,000 units, Buick Zhijing E7 exceeded 10,000 in one month. Note, these cars use SAIC's technology feedback —From "Market for Technology" to "Technology Export", SAIC's role flip is impressive.

Globalization is not just talk, SAIC really sells cars to over 170 countries

At the ceremony, delivery scenes connected Shanghai to London, Indonesia, Singapore... This is not just showboating. SAIC has over 100 parts bases overseas, 3,000+ dealership networks, raising 42 RoRo fleet Anji Logistics, 8 international routes covering global major markets.

MG in Europe has been China Brand Sales Champion for 11 consecutive years, sold over 300,000 units in 2025, becoming the first China Brand to accumulate over a million in Europe and UK. January-April this year, Europe alone sold 120,000 units, growth 22%.

And SAIC not only sells cars, Semi-Solid State Batteries, IM AD Intelligent Driving System, i-Smart Vehicle System all spread overseas.From Product Going Global to Value Chain Going Global, this move is fierce.

100 million units is a milestone, but not the end point. SAIC also said, this is the starting line of "Second Entrepreneurship". 2014 was the first to transform to New Energy, 12 years down, Independent, Joint Venture, Commercial, Overseas —A Thriving Boomsituation has emerged. The sentence I admire most is: "Understand Cars, Understand You Better". Tech is cool, if it doesn't land on users it's scrap. From social media bloggers to National Team Player Yang Chen, from London intern doctors to left-behind children welfare volunteers, every real story is the background color of these 100 million cars. So, don't just stare at numbers. After 100 million units, can SAIC continue "100 Million Mile Journey Together"? It depends on whether it can make the next 100 million users feel —This Automaker, Really Understands Me.

Toyota Motor recently announced plans to further increase the scale of its overseas production cuts, raising the total overseas production reduction volume from June to November of this year from the previously planned 38,000 units significantly to 83,000 units, doubling the production cut magnitude. Combined with the preliminary production cut of 40,000 units by Japanese domestic factories for the Middle East market in the first quarter of this year, Toyota's total vehicle capacity reduction plan within half a year exceeds 120,000 units.

Toyota's capacity adjustment this time is highly targeted, mainly aiming at sluggish markets and slow-selling models, including overseas factories in Thailand, India, Malaysia, etc., and overseas production lines dedicated to the Middle East market. Main models with production cuts are concentrated on fuel version RAV4, Camry, Fortuner, Innova and other traditional fuel SUVs and family sedans. Hybrid models and pure electric models capacity remains basically unchanged.

On the surface, short-term geopolitical crisis and supply-demand imbalance might be the main reasons for Toyota's current production cuts, but actually, this also reflects that holding firm to the internal combustion engine base in the global new energy wave has already fallen into a strategic disadvantage.

For a long time, Toyota insisted on hybrid technology route, pure electric model R&D and launch pace was slow, relying on durability and resale value advantages to deep-plow global fuel car blue ocean market. Especially in emerging markets like Middle East, Southeast Asia long-term occupied absolute leading position. However, in recent years, global auto industry landscape completely reconstructed, core markets like China, Europe comprehensively accelerated electrification substitution, Southeast Asia, Middle East and other traditional fuel car "safe havens" also began to gradually introduce new energy supportive policies, local new energy models rose rapidly, diverting fuel car market share.

Toyota continuously shrinking overseas capacity also reflects the new logic of current multinational automakers' global layout. In the past, automakers pursued global layout, capacity full coverage, to reduce production costs with economies of scale; Nowadays global geopolitical conflicts frequent, regional trade barriers rising, car market regional division intensifying, blind expansion of global capacity risk surged. Multinational automakers began to shift from "global expansion" to "precision layout", shut down inefficient, slow-selling fuel car capacity, concentrate funds and capacity into high-growth electrification tracks, becoming common industry practice.

It can be said, this global capacity shrinkage wave initiated by Toyota, also sounded a warning bell for current Chinese independent brands expanding overseas.

In recent years domestic car market fierce competition intensified, top automakers increased investment in overseas factories, complete vehicle exports, Middle East, Southeast Asia are exactly the core growth markets for Chinese automakers going overseas, in 2025 China's car export volume to the Middle East exceeded 1.4 million units, coinciding with Toyota passively yielded market share due to logistics disruption, geopolitical turmoil, many domestic automakers followed suit to increase regional capacity deployment and inventory stocking. But Toyota's dilemma directly exposed the common risks of global car building: single region geopolitical turmoil, sea shipping routes blocked, regional demand changes, can instantly severely damage heavy-asset overseas capacity layout.

At the same time, Chinese automakers going overseas also currently hide two hidden risks: One is some automakers blindly copying Japanese past heavy-asset factory building models, rapidly launching complete vehicle factories in emerging markets, capacity expansion pace far exceeds local new energy penetration rate, very easy to follow Toyota's fuel car capacity excess trap; Two is some overseas products structure single, over-rely on fuel cars or low-price entry-level new energy cars, lack diverse product matrix adapted to different regional policies, road conditions, insufficient ability to resist market volatility.

In addition, geopolitical supply chain risks Toyota is currently facing also reminding Chinese automakers, going overseas cannot only pursue sales volume scale, must simultaneously build diversified shipping routes, disperse regional market layout, accelerate overseas supply chain localization support, reduce impact brought by external sudden risks.

Looking at the overall situation, Toyota's overseas production cut is another heavy signal of the end of the global fuel car era. Auto industry stock competition arrives, geopolitical risk, energy change, electrification wave triple variables are reshaping global auto industry new rules. For all multinational automakers, relying on fuel cars to lie back and win era has completely ended, only by accelerating capacity structure reform, can adapt to the brand new global auto market layout.

May 20, Stellantis and Dongfeng signed a non-binding memorandum of understanding, planning to establish a joint venture in Europe. Among them, Stellantis holds 51% equity, while Dongfeng holds 49%.

This joint venture will do four things: sell VOYAH brand new energy vehicles, localize production at Stellantis' Rennes factory in France, joint procurement, joint R&D.

After establishing the "Leapmotor International" joint venture with Leapmotor in Europe, Stellantis extended an olive branch to its old partner Dongfeng again this time, adding a layer of consideration for "localization production".

Does this mean Chinese automakers have completely changed their strategy for going global?

First, Clarify the Global Expansion Models

Before analyzing this, let's first clarify the several strategies Chinese automakers use for going global.

The first is whole vehicle export. Cars are built domestically, shipped on boats, and sold by dealers locally. This model is the simplest with the lowest investment, but it lacks market control; once tariffs rise, the price advantage disappears. Chery's early export to Russia followed this path; once tariffs were added, the rhythm was completely disrupted.

The second is KD assembly. Parts are shipped locally and assembled in local factories. This model is a step up from whole vehicle export, able to evade some tariffs and carry a "Locally Made" label. But honestly, many KD factories are just large screw-nailing plants; core parts are still shipped from China, with limited localization. Many Geely and Chery factories in Southeast Asia and the Middle East use this model. It solves some problems but not the root ones.

The third is building factories alone. Bringing money overseas to buy land, build factories, hire people, and build channels. This is the most "hardcore" way and the path taken by top independent automakers. Great Wall Motors and BYD have adopted this model. BYD's Thailand factory is already in production, the Brazil factory is under construction, and the Hungary factory is in planning. The benefit is becoming a true "local brand", evading import tariffs, and securing local government industrial subsidies. But the investment is high, the cycle is long, and management complexity increases by an order of magnitude.

The fourth is acquiring local brands. Geely acquired Volvo, later invested in Daimler, and acquired Lotus. This is the path Geely walked earliest and most systematically. Partial equity or binding with a local giant equals directly inheriting the other party's brand assets, channel networks, and local compliance capabilities. But integration difficulty is huge, with high risks of cultural conflict and management chaos.

And this cooperation between Stellantis and Dongfeng does not fit well into any of the above.

Strictly speaking, it is a combination of the third and fourth types.

Using Stellantis' existing French factories for production is borrowing the other party's manufacturing assets, not building independently; selling VOYAH using Stellantis' existing European sales channels is borrowing the other party's commercial assets. Moreover, the capital structure is shared equity, not Party A hiring Party B to help, but a true interest binding.

This model, I will temporarily call it "Grafting Global Expansion" — not planting a tree yourself, but grafting branches onto an existing big tree.

Why is this path worth attention? Because it solves several core pain points of going global.

1. Channel. The European automotive dealer system is very closed. For a new Chinese brand to build a network from scratch, it would take three to five years. But Stellantis has dealer networks for brands like Peugeot, Opel, and Citroën. These are resources accumulated over decades and cannot be bought with money.
2. Factory. If the Rennes factory can be utilized, VOYAH doesn't need to build from scratch, saving a lot of time and funds.
3. Brand. Selling VOYAH cars separately in Europe, whether consumers recognize you is one thing, but if backed by Stellantis, the trust level will be different.

Where Does Localized Production Really Matter?

Many people talking about localized production first think "evading tariffs". That's right, EU anti-subsidy taxes plus tariffs mean a Chinese EV pays dozens of percentage points more tax entering Europe, basically wiping out the price advantage. But tariffs are just one dimension.

More critical is the carbon footprint. The EU Carbon Border Adjustment Mechanism (CBAM) has started trial operation, and future import vehicle carbon emissions will also need to be considered. If cars are produced in Europe using European green electricity, the carbon footprint will be much better. In the next 5 years, the cost pressure in this area will increase.

Another point to consider is the supply chain.

Dongfeng is producing in European factories, but what about the supply chain? The memorandum wrote "joint procurement", which means some parts are still sourced from China, leveraging Dongfeng's procurement capabilities in China's new energy ecosystem to reduce costs. But the local supply chain must keep up gradually, otherwise, if geopolitical risks arise, production lines will stop.

Next, the brand. European consumers have high loyalty to car brands; Germans buy Volkswagen, French buy Peugeot. This is a habit of decades. Chinese new brands want to break this habit; product strength alone is not enough, there must be "trust endorsement". Stellantis' participation is this endorsement.

Of course, the cost is that the joint venture is led by Stellantis, and the voice in the European market is mainly in Stellantis' hands. This is a price that has to be paid.

Who Will Be Mainstream in the Next Three to Five Years?

My judgment is that in Europe, "binding with local giants" will become the mainstream.

The reason is simple, the European market is too hard to fight. Tariff barriers are highest, regulations most complex, consumers most picky, competition most intense. The whole vehicle export model will become increasingly difficult in the European market, forcing Chinese automakers to find a way out of localized production.

On the other hand, Stellantis needs to make up for the electrification shortcoming. Other Western automakers, such as Ford, General Motors, Renault and other traditional automakers, are struggling in transformation dilemmas. They have channels, factories, and brands, but lack new energy capabilities. This is exactly what Chinese automakers can provide.

Both sides have needs, so cooperation will increase.

The method may not necessarily be a joint venture form like Stellantis and Dongfeng, it could also be more flexible forms such as technology licensing, channel sharing, joint development, but the core logic is the same: not fighting alone, leveraging momentum to land. While in markets like Southeast Asia, Middle East, South America, building factories alone and KD assembly remain mainstream because barriers are relatively low and price advantages still work.

However, "binding with giants" is not without risk. Being tied up with a giant means destiny is partly in others' hands. What if Stellantis cooperates with Dongfeng today but finds a better partner tomorrow? What if joint venture performance fails to meet expectations? What if there are disagreements on product positioning and pricing strategies? Dongfeng Peugeot Citroën's history has already proved that the relationship between joint venture partners is not always smooth.

From Dongfeng Peugeot Citroën to European joint venture, over thirty years, the relationship between Dongfeng and Stellantis has completed a "two-way rush". Behind the role reversal is the accumulation and transformation of the Chinese automotive industry over decades. Chinese automakers are no longer satisfied with "selling cars"; they want "rooting". The prerequisite for rooting is learning to cooperate with locals.

Whether this time can succeed, we will wait and see.

Author |Ben Yi

Editor |De Xin

In April 2026, there were 660 car models available in the Chinese market, but only 29 had monthly sales exceeding 10,000.

In late May, Shenzhen, 13 leaders from the automotive industry gathered at the 4th Future Car Pioneer Conference. Morning talks focused on product reconstruction, afternoon discussions on vast horizons, but almost everyone was saying the same thing: The competition of specifications is unsustainable; the next card to play must be the brand.

Industry profit margins fell to 2.9%, domestic passenger car retail dropped nearly 19% year-on-year, and more than 150 new models crammed into the market this year but most couldn't even enter user choice circles. The endpoint of the "specification racing" road should be visible to everyone.

Li Bin quoted a set of data from McKinsey research: the ranking of brands in consumer car purchasing decisions ranked fifth two years ago, but has now risen to second. "Believe it will soon enter the first place."

Source: Future Car Pioneer Conference

This judgment was repeatedly verified in the mouths of different speakers.

Avatr Chairman Wang Hui said consumers no longer need you to tell them how fast the acceleration is or how far the range is. "They want to know more rationally what this brand believes in, pursues, and whether it is worthy of entrusting."

Leapmotor Senior Vice President Xu Jun was even more direct. "Specifications have become the most basic entry ticket, no longer the deciding factor."

Chery Vice President Wang Lang believed that cost-performance ratio solves "worth buying", brand value solves "worth believing, worth long-term choosing, worth recommending to others".

Every press conference talks about 800V platforms, large AI models, end-to-end intelligent driving. "If it continues like this, there will be no product differentiation."

If important decision-makers in the whole industry begin to collectively use "brand" instead of "specifications" for external expression, this itself conveys a clear signal: the competition of China's intelligent electric vehicles is shifting from "hardware racing" to competition at the brand dimension.

Avatr's Wang Hui shared a set of data from CPCA: domestic car sales exceeded 34.4 million vehicles in 2025, but profit margins were only 4.1%.

By January-February 2026, this number fell further to 2.9%.

He spoke sharply on site, "Sales without profit are fake sales, scale won by price wars is even more false prosperity."

CPCA Secretary-General Cui Dongshu added a supplement to this data from the supply chain perspective.

Whole vehicle enterprises selling cars don't make money, "basically becoming a state of working for upstream", while mining industry net profit margins have risen to about 40%. Car companies expanded the industry cake, but profits were taken by upstream.

Source: Future Car Pioneer Conference

The market side is also seriously challenging. Li Bin revealed that domestic passenger car retail sales dropped 18.9% year-on-year from January to April 2026, and even dropped more than 24% in the first few weeks of May. CPCA's annual forecast adjusted from -1% at the beginning of the year to -11% all the way. Cui Dongshu himself said, "This "drastic forecast adjustment is historically rare".

The backlash caused by price wars has also fully manifested.

Wang Hui calculated an account, "Price can only hold for two months, after two months there is not much effect, and there is a pile of old users being backstabbed." Since April, nearly 20 products in the market have announced price hikes. Avatr's own 06T and new Avatr 12 average price was 20,000 to 30,000 yuan higher than the previous generation. He said, "After the price increase, we can finally sleep soundly. Because we told customers we wouldn't stab them in the back, this counts as fulfilling the promise to users."

In a sense, it is not that car manufacturers chose to wake up proactively to carry out "brand upgrading", this is more of a passive turn under profit squeeze. When prices can't be driven down, specifications can't stack differences, "brand" almost became the only competition dimension that hasn't been fully penetrated.

Consensus is consensus, but specifically "how to build a brand", each gives a completely different answer.

Li Bin stated he would not make extended range, plug-in hybrid, and MPV. "Cars that are obviously not profitable will not be developed." Basic R&D (chips, operating systems, batteries) is firmly invested, application layer looks more at ROI. NIO brand average transaction price is about 400,000 yuan, 50,000 yuan higher than BMW, 130,000 yuan higher than Audi, achieving operating profit for two consecutive quarters. ES8 launched 215 days, delivered over 100,000 units, consecutive 5 months over 400,000 yuan regardless of energy form sales champion, so the current NIO is "save where you should, spend where you should".

Changan Group just streamlined its future five-year products from 63 models to 36 models. Wang Hui's led Avatr has struck a combination of punches in the overseas market: entering more than 40 countries, Avatr 11 starts at 290,000 yuan in China, selling near 450,000 yuan overseas, Thailand luxury electric SUV sales first, achieving stable profit after only one and a half years entering overseas.

"50:50 market, but looking globally, may need to put 80% of resources to gain the recognition of another 50% of customers." Wang Hui's underlying meaning is obvious, Domestic competition is exhausted, globalization is real incremental.

Xu Jun did not reveal details of the second brand, but said a thought-provoking sentence, "The end game of China's automotive industry development must be brand". When Leapmotor starts talking about brand upgrading, this itself is a clear signal. System synergy capability (CTC+ Central Integrated Architecture overall optimization), scenario definition capability (C16's large six seats solves second-child family travel, not just two extra seats), and long-term compound interest accumulated from over a decade of full-domain self-research, are the three layers of "hidden kung fu" supporting Leapmotor's turn.

Zhang Zhengping revealed, AITO M9's intelligent driving mileage share has exceeded 52% (overall data of 280,000 vehicles). Users choose AITO Top 3 reasons are: Intelligent driving, Safety, Brand, traditional "high performance" (acceleration, range) even did not enter the top three.

AITO also did one thing in the manufacturing end: "One Car One File", every screw of each car, each welding time, voltage, current, and operator have complete records. This is adding user trust in the brand from the underlying infrastructure.

New Generation AITO M9｜Source: HarmonyOS Intelligent Official Website

If a car company wants to build "Intelligent Brand Competitiveness" in the AI era, may need to learn from Geely.

Geely Research Institute Director Li Chuanhai admitted facing severe AI talent shortage, "Those who understand AI don't understand products, those who understand mechanics don't understand training models", and traditional recruitment can't attract top AI talents, those people are in large model companies.

Geely's solution is not hard recruitment, but building an ecosystem, and cooperating with partners like StepFun, Qianli Technology, XinQing Technology, etc., pulling AI talents into their own ecosystem. Product end, ZEEKR 4 years cumulative delivery nearly 750,000 units, average price over 300,000 yuan, ZEEKR 9X average transaction price over 530,000 yuan, consecutive months over 500,000 yuan SUV sales champion, proved the output ability of this system.

The intelligent driving supply chain side also has resonance on this.

DeepRoute CEO Zhou Guang judged, current small model intelligent driving has reached the ceiling, "Investment is increasing more and more, improvement is slower and slower".

He used "See-Saw Effect" to describe: small models solved Shanghai's problem, Shenzhen might get worse, the repeated see-saw between versions is the core reason users find it difficult to trust intelligent driving systems long-term.

DeepRoute bet on large model paradigm transition, deployed 40B base model, goal is to increase city safety takeover mileage from tens of kilometers to over 1,000 kilometers. If realized, intelligent driving will change from "usable" to "commonly used", in reverse will also become the core barrier of brand differentiation.

Source: 2026 Future Car Pioneer Conference

Additionally, worth mentioning is that the topic of FSD entering China was mentioned multiple times that day.

Zhang Zhengping stated "New M9 equipped with 6 laser radars, 40 sensors, hardware configuration definitely not lose to FSD". Zhou Guang was much more open-minded, he believes "This is a positive signal, Tesla FSD entering will make intelligent driving safety higher", but also pointed out, if still insisting on small model paradigm, "it will be quite troublesome".

Competition has upgraded, every company must bring out real stuff.

"Future ultra-luxury cars must collapse. There is no luxury car concept in the world, only premium car concept. Luxury will be replaced, just like electronic consumption, no century accumulation, only technological innovation." Cui Dongshu gave a very radical judgment.

But the big shots doing premium products on stage may not fully agree with this.

Li Bin holds 400,000 yuan average price not letting go, Wang Hui's Avatr overseas wants to sell 450,000 yuan, Xiang Xingchu's Luxeed S800 consecutive 8 months holding luxury sedan sales champion over 700,000 yuan, Zhang Zhengping's AITO M9 consecutive 2 years 500,000 yuan level champion.

Interesting is, This "disagreement" on luxury concept may not be true disagreement.

Cui Dongshu speaks of old luxury disintegration, that is luxury supported by century accumulation, handcrafting, Logo premium. What Chinese brands are doing is exactly using "Technology + Experience" to redefine luxury, which is "Real luxury is not who you are like, but who you are."

As the only foreign car company guest that day, Mercedes-Benz China R&D Head Drummond Jacoy being present on site itself makes the discussion interesting.

He mentioned "Oil and Electric Equipped with Intelligence" and "Chinese Speed" in speech, for example Chinese R&D team has begun to lead multiple global projects, including new generation S-Class rear entertainment system. When asked if Chinese luxury new brands pose a threat to Mercedes, his answer was relatively restrained, but significant: "China has many very excellent brands and products, I highly respect them."

Source: 2026 Future Car Pioneer Conference

Cui Dongshu and manufacturer representatives actually speaking of "Luxury" one body two sides: Old luxury is dissolving, new luxury is building. Disagreement also fundamentally not at "whether to do premium", but "what supports premium".

When Luxeed S800 sells to 800,000 yuan with technology, when NIO average price exceeds BMW, market data has already given the answer. The foundation of brand premium, is shifting from historical accumulation to technology experience.

This is probably the most worth paying attention to topic of this year's Future Car Pioneer Conference: when industry profit margin drops to 2.9%, when specification competition reaches the end, each car brand must answer is, what exactly are we selling?

Obviously, a function configuration table piled with various specifications is already not attractive enough.