China continues to dominate the global market, with Chinese OEMs (original equipment manufacturers, companies that design and produce vehicles under their own brands) accounting for 30% of the worldwide passenger vehicle market and 70% of the global EV market. This dominance is expected to continue, driven by supportive government policies, declining battery costs and rising consumer adoption.
The Chinese electric vehicle (EV) sector has been under the spotlight recently, with news of a price war, with stocks coming under significant selling pressure following BYD’s announcement of discounts on May 23. We believe that these discounts are more likely a promotional strategy aimed at selling older models rather than an indication of fundamental weakness.
We maintain a positive view on the sector’s long-term prospects. Although near-term pricing pressures persist, the Chinese EV market shows strong underlying growth momentum. Domestically, the penetration rate rose from 6% in 2020 to 45% in 2024, with market leadership concentrated among a few key players such as BYD and Geely.
