After a strong run of growth in the first half of 2025, China’s electric vehicle (EV) market is beginning to feel the pressure of intensifying competition, as the country’s largest EV manufacturer, BYD, reported its first monthly delivery decline of the year. In July, BYD shipped 341,030 vehicles, down from 377,628 in June, and roughly flat compared to the same period last year — a notable dip in an otherwise upward trajectory.
The slowdown underscores the impact of a heated price war among Chinese automakers, which has not only begun to erode margins but also drawn scrutiny from policymakers in Beijing, who are now cautioning against “excessive competition” that could destabilize the industry.
Market Shifts: Winners and Losers
While BYD’s July figures represent a pause in growth following a strong climb from 296,446 units in January, other major EV players also posted notable declines.
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Li Auto delivered 30,731 units, a sharp drop from 36,279 in June and a staggering 39.7% year-on-year decline. The company is now facing its second consecutive monthly drop, raising concerns about its short-term sales momentum.
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Nio fared no better, recording 21,017 deliveries, down from a 2025 high of 24,925 units in June. The company also posted a 2.7% decline year-on-year, with sales slipping across all three of its core product lines.
Despite the downturn, both Li Auto and Nio are pinning hopes on new model launches. On July 31, Li Auto unveiled its first all-electric SUV, the Li i8, with deliveries slated to begin on August 20. Nio also launched its new L90 SUV, deliveries of which began on August 1, while a seven-seater variant is scheduled for late September.
Bright Spots in a Crowded Field
In contrast to BYD, Li Auto, and Nio, several emerging and tech-backed automakers bucked the slowdown trend.
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Xiaomi delivered over 30,000 vehicles, up from 25,000 in June — its best monthly performance since March. The surge was largely driven by the launch of its new YU7 SUV earlier in July.
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Xpeng extended its winning streak with 36,717 vehicles shipped in July, marking its ninth consecutive month of deliveries above 30,000 units and setting a new monthly record for the company. A second-generation Xiaopeng P7 sedan is set to debut on August 6, possibly fuelling continued momentum.
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Leapmotor, partly owned by Stellantis, also made headlines with 50,129 units sold, its highest-ever monthly figure, as the brand continues to gain traction among budget-conscious buyers seeking smart EV options.
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The Harmony Intelligent Mobility Alliance, led by Huawei and featuring Aito, Chery, and Maextro, reported 47,752 units in combined sales. The bulk came from Aito’s Wenjie series, which alone accounted for 40,753 deliveries — a robust showing in an increasingly tech-driven EV space.
Meanwhile, Geely-owned Zeekr saw flat month-on-month growth, with 16,977 units delivered in July — almost identical to its June performance, signaling stagnation even as newer competitors surge ahead.
Policy Caution as Competition Heats Up
The recent price war, kicked off when BYD slashed prices on several of its hybrid and battery-only models by up to 30% in May, has triggered a wave of similar discounts across the industry. While beneficial for consumers, the deep cuts have strained company margins and rattled investor confidence.
In response, Chinese policymakers have signaled concerns, warning automakers to avoid destabilizing tactics and to pursue “orderly development” in the country’s rapidly evolving EV sector.
Outlook: Growth With Growing Pains
Despite the short-term volatility, the broader outlook for China’s EV market remains bullish, with innovation, competition, and government support continuing to fuel demand. However, July’s numbers may serve as an early warning that breakneck growth is now colliding with market saturation, pricing pressure, and regulatory recalibration.
For market leaders like BYD and upstarts like Xiaomi and Xpeng, the next few months will be crucial in determining who can sustain growth — and who risks getting left behind in China’s high-stakes EV race.