In 2024, the domestic new energy vehicle market thrived amidst intense competition. From price wars to technological races, from expanding production scales to vying for industry influence, the Chinese automotive sector remained a hotbed of rivalry. This year marked the self-reinvention of established automakers, the ascent of budding brands, and the demise of those unable to keep pace. Reflecting on the tumultuous confrontations between established players and newcomers in the new energy vehicle market, it was akin to a grand saga of contrasting fortunes.

01. 2024 Sales Reports for New Energy Vehicle Makers

The most notable aspect was 'sales.' On the first day of the new year, multiple mainstream new energy vehicle brands unveiled their 2024 sales figures, presenting impressive results.

BYD, the leading new energy vehicle manufacturer, disclosed its production and sales data for December 2024. In December alone, it sold 514,800 new energy vehicles, with a cumulative sales of 4,272,100 units from January to December, marking a 41.26% year-on-year increase.

In 2024, the emerging forces in the automotive industry, represented by NIO, Xpeng, and Li Auto, all grew steadily. NIO delivered a total of 222,000 new vehicles for the full year, a 38.7% year-on-year increase. Xpeng delivered 190,100 units, while Li Auto achieved a total delivery of 500,500 units.

As a rising star in 2024, Xiaomi Automobile experienced a significant surge. According to Xiaomi Automobile, by the end of 2024, the annual delivery volume of Xiaomi SU7 had surpassed 130,000 units, surpassing all 2024 targets ahead of schedule. In the new year, Xiaomi Automobile's factory will continue to ramp up production and accelerate deliveries.

Meanwhile, Huawei's collaboration with automakers garnered significant industry attention. Thalys' latest announcement revealed that its new energy vehicle sales from January to December amounted to 426,885 units, a 182.84% year-on-year increase.

Among traditional manufacturers, Geely Automobile recently disclosed that its cumulative sales in 2024 reached 2,176,600 units, a 32% year-on-year increase. Changan Automobile reported total sales exceeding 2.68 million units for 2024, a seven-year high. In terms of new energy vehicles, sales surpassed 730,000 units, a year-on-year increase of over 50%; overseas sales exceeded 530,000 units, up over 47%. Great Wall Motor announced a December 2024 sales volume of 135,300 units, a 20.25% year-on-year increase. From January to December 2024, its cumulative sales volume reached 1,233,300 units, up 0.21% year-on-year. In December 2024, it sold 42,300 new energy vehicles, with a total of 321,800 new energy vehicles sold for the full year.

From a sales perspective, 2024 was undoubtedly a year of harvest for China's new energy vehicles. This year marked a milestone achievement - China became the first country to produce 10 million new energy vehicles annually. Additionally, new technologies emerged continuously, such as BYD's fifth-generation DM hybrid technology, Geely Automobile Group's Thor EM-i super hybrid system, and the official launch of NIO's flagship sedan ET9.

02. Automakers Struggling in 2024

Beneath the heated sales lay the harsh reality and helplessness of some automakers facing challenges. Since the beginning of 2024, various 'parity policies' between fuel and electric vehicles sparked a price war that persisted throughout the year. Consequently, joint venture brands prioritized market share through aggressive pricing, while independent brands and newcomers fiercely competed with rapid new model launches. All parties resorted to various tactics to secure market share, merely to survive.

However, the 'Matthew Effect' in China's auto market became increasingly evident, with leading automakers continuously gaining market share while those at the bottom struggled and faced liquidation.

Towards the end of the year, news emerged that Baidu and Geely's joint venture automaker Jiyue was struggling to survive. According to incomplete statistics, between 2020 and 2024, several automakers, including Dongfeng Yulong, Lifan Automobile, Zotye Auto, Borgward, Evergrande Auto, WM Motor, ENOVATE, AITO, HiPhi, and Jiyue, exited the market due to bankruptcy liquidation, share transfers, bankruptcy reorganization, company dissolution, and other reasons. Among them, there were both traditional automakers and newcomers that had only been established in recent years.

Certainly, this is a necessary phase as the market transitions towards new developments and is not surprising. It aligns with the logic and laws of market evolution. However, facing an increasingly fierce price war, the path for new energy vehicles remains challenging.

03. Survival Takes Precedence Over Profit

Against this backdrop, many independent automakers are facing difficulties. In an increasingly competitive market, automakers, including independents, have generally fallen into the trap of price wars, resulting in increased sales but squeezed profits. Data from the China Passenger Car Association shows that from 2020 to 2023, the profit rate of China's automotive industry fell from 6.1% to 5%, and in the first three quarters of 2024, it dropped further to 4.6%.

Today, China's automotive industry's transformation towards electrification and intelligence has entered its second half. With the penetration rate of new energy vehicles exceeding 50%, independent automakers and joint venture automakers based on fuel vehicles have reached a stalemate, and independent automakers have also begun fiercely competing for survival space among themselves.

For any independent automaker, staying in the game is paramount before the new market landscape stabilizes completely. Under such circumstances, from pricing strategies to corporate management and market expansion, independent automakers have begun prioritizing substance over appearance.

To broaden sales channels, many automaker executives have had to step into the limelight. Among them, Xiaomi Chairman Lei Jun stands out as the most representative. With Lei Jun breaking the mold, more and more automaker managers have begun to create their own IPs and join the 'traffic war,' even frequenting live streaming rooms. NIO founder Li Bin, Great Wall Motor Chairman Wei Jianjun, Lu Fang, CEO of HOVO Auto, and Yu Chengdong, Chairman of Huawei's Intelligent Automotive Solutions BU, have all made their live streaming debuts.

Behind the CEOs' scramble for attention lies the same rationale as the price war. Once a leading company initiates a move, others are compelled to follow suit to maintain sales and protect their brand reputation.

04. Conclusion: Awaiting the Competitive Landscape's Confirmation

As the saying goes, 'the one who ties the bell should untie it.' The root cause of the fierce competition in the new energy vehicle market lies in the uncertain market landscape. No automaker still in the game wants to withdraw voluntarily.

Therefore, the automotive market will remain turbulent in 2025, with competition expected to intensify and the 'slaughter' to become even more brutal. In other words, the price war is unlikely to cease, and the market landscape will continue to undergo significant adjustments. Jiyue is definitely not the last to fall. Who will remain at the 'table' will be crucial in 2025.

The reason behind this is that with product capabilities and channels largely established, it may ultimately come down to price: whoever offers the lower price will see an increase in sales, but this will further strain cash flow.

Therefore, for automakers that cannot yet achieve self-sufficiency, they must either reduce operating and manufacturing costs to increase gross profit margins or rely on financing. At this juncture, new forces must compete not only in sales but also in who has deeper pockets and stronger financing capabilities. The challenge lies in the fact that both under-scaling and over-scaling can lead to tight cash flow. For many enterprises, once a certain threshold is reached, it can directly spiral into demise: the tighter the cash flow, the lower the sales; the lower the sales, the less money to cover operating costs, until the cash flow is completely depleted.

Therefore, in 2025, we may witness some automakers being eliminated, some being acquired, and some gritting their teeth and persevering.

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