UOB Kay Hian
Date of Report: 23 May 2025

China’s Electric Vehicle Market in 2025: Weekly Sales Insights, Top Stock Picks, and Regulatory Impact

Introduction

China’s automobile sector continues to evolve rapidly, with electric vehicles (EVs) and plug-in electric vehicles (PEVs) capturing a record share of the market. In the 20th week of 2025, the sector saw dynamic shifts in sales, technological innovation, and new regulations. This comprehensive analysis reviews the latest sales trends, performance of leading automakers, peer comparisons, and the impact of new battery safety standards.

Market Overview: Sales, Trends, and Key Figures

• Total passenger vehicle (PV) insurance registrations: 382,000 units (+14.1% YoY, -1.0% MoM, -14.0% WoW) in the 20th week of 2025.
• PEV market share: Climbed to a year-to-date peak of 56.3% (+6.1ppt YoY, +3.7ppt MoM, +6.1ppt WoW).
• Cumulative PV retail sales (first 20 weeks): 7.82 million units (+7.0% YoY), with 3.795 million PEVs (+31.9% YoY) and 4.025 million internal combustion engine (ICE) cars (-9.1% YoY).
• Sales dip in ICE segment: Continued sharp decline, offsetting robust PEV growth.

Top Picks and Sector Outlook

• Sector rating: MARKET WEIGHT maintained.
• Preferred segment order: OEMs > auto parts manufacturers > auto dealers.
• Top BUYs: BYD, Geely, XPeng (with XPeng newly added as a top pick due to imminent turnaround potential).

BYD: Innovation and Global Expansion Drive Growth

• Insurance registrations (Week 20): 60,810 units (+8.4% YoY, -1.0% MoM, -17.4% WoW), representing a 28.3% share of China’s PEV market.
• Segment breakdown:
  • BYD brand (Dynasty Series + Ocean Series): 55,100 units (+2.9% YoY, -1.8% MoM, -18.9% WoW)
  • Denza: 2,920 units (+47.3% YoY, -11.8% MoM, -2.3% WoW)
  • Fangchengbao (FCB): 2,760 units (+604.1% YoY, +38% MoM, +3.8% WoW)
  • Yangwang (YW): 30 units (-78.6% YoY, flat MoM, +50% WoW)
• Tech-driven product upgrades in Q2 2025:
  • Qin Plus: Extended design, smarter hybrid efficiency.
  • Yuan Plus: Cost-effective pure vision ADAS.
  • Dolphin: Expanded dimensions, smart driving features.
  • Seagull: Entry-level, simplified ADAS.
  • SeaLion 05 EV: Broader electric SUV lineup, enhanced interior.
• Growth drivers: Best-selling models (Seagull/Dolphin Surf), competitive pricing, Blade Battery technology, DM-i Hybrid, e3 drivetrain, and rapid international expansion (15 European markets, new R&D in Hungary).
• Financials and Valuation: 2025-27 net profit forecasts: Rmb55.81b / Rmb65.73b / Rmb75.82b. Sales estimates: 6.0m / 7.0m / 8.0m units. Target price: HK\$510.00 (10-year DCF, WACC: 11%, terminal growth: 4%, 25x 2025F PE).

Geely: New Launches and Global Expansion

• Geely Galaxy: 6,880 units (+133.7% YoY, +19.2% MoM, -3.9% WoW)
• Zeekr: 3,640 units (-7.8% YoY, +37.4% MoM, -15.5% WoW)
• Key launches:
  • Starshine 8 hybrid sedan: Over 10,000 orders within 6 days of launch (Starting price: Rmb125,800; built on GEA platform; strong value proposition vs. BYD Han DM-i).
  • Galaxy M9: Flagship six-seat SUV, global debut in Milan.
• Zeekr’s global push: Models like 7X, 8X, 9X broaden SUV and hybrid offerings; overseas ramp-up with 7X deliveries in Europe and launches planned in Japan (Zeekr X, 009) in 2025.
• Financials and Valuation: 2025-27 net profit forecasts: Rmb14.69b / Rmb15.13b / Rmb19.43b. Target price: HK\$31.00 (23x 2025F PE).

Li Auto: Facelifts and Strategic Adjustments

• Insurance registrations (Week 20): 9,240 units (+17.8% YoY, +4.8% MoM, +13.2% WoW)
• Key drivers:
  • Launch and delivery of facelifted L6/L7/L8/L9 models, equipped with advanced ADAS, AI-driven systems, L3 readiness.
  • First pure BEV (i8) to launch in July 2025.
  • Strategic initiatives: aggressive promotions, expanded retail/charging networks, internal reforms.
• 2025 sales target: Reduced from 700,000 to 640,000 units (slightly above analyst estimates) due to weaker L6 orders. Focus on cost controls to maintain profitability.
• Financials and Valuation: 2025-27 net profit forecasts: Rmb9.06b / Rmb11.57b / Rmb14.95b. Deliveries: 600,000 / 720,000 / 865,000 units. Target price: HK\$160.00 (10-year DCF, WACC: 14%, terminal growth: 4%).

XPeng: Tech Upgrades and Turnaround Potential

• Insurance registrations (Week 20): 5,811 units (+186.0% YoY, -12.0% MoM, -15.4% WoW)
• Key highlights:
  • Strong demand for Mona M03, P7+.
  • 1Q25 revenue: Rmb15.81b (+141% YoY, -2% QoQ); net loss: Rmb664m (-51% YoY, -50% QoQ).
  • Guidance: Targeting profitability by 4Q25; 2025 deliveries to double YoY to 380,000 units; 2Q25 guidance of 102,000–108,000 units (up 238-258% YoY), revenue Rmb17.5b-18.7b (up 116-131% YoY).
  • Gross margin improvement expected from higher premium model sales and scale.
• Key 2025 launches: Mona M03 Max, G7 SUV, new P7 sedan, Kunpeng Super EV, all with in-house Turing Chips and L3/L4 autonomy by 2026.
• Global expansion: Plans to enter 60 countries, open 300 new service stations.
• Financials and Valuation: 2025-27 delivery estimates: 400,000 / 500,000 / 650,000 units. Net loss estimate for 2025: Rmb1,591m; Net profit for 2026-27: Rmb1,098m / Rmb5,273m. Target price: HK\$150.00 (10-year DCF, WACC: 14%, terminal growth: 4%).

Table: Peer Comparison Snapshot

Other Noteworthy Players

• Leapmotor: 7,500 units (+108.8% YoY, -12.5% MoM, -3.8% WoW), cumulative 124,200 units (+115.5% YoY).
• Aito: 7,500 units (+12.9% YoY, +71.4% MoM, -0.7% WoW), cumulative 87,900 units (-29.9% YoY).
• Xiaomi: 7,200 units (+252.9% YoY, +38.2% WoW), cumulative 119,300 units (+933.4% YoY).
• Nio: 5,800 units (+30.9% YoY, -6.1% MoM, +4.1% WoW), cumulative 77,900 units (+50.8% YoY).
• Tesla: 3,100 units (-68.9% YoY, -43.0% MoM, -58.2% WoW), cumulative 172,700 units (-5.2% YoY).

Regulatory Update: New Battery Safety Standards

• GB 38031-2025 regulation (effective July 26): Mandates fire- and explosion-proof batteries, stricter thermal runaway and durability tests.
• First to comply: Geely/Zeekr and CATL, reinforcing technology leadership.
• R&D cost impact: 5-20% increase, benefitting leading players (BYD, Geely), pressuring smaller manufacturers.
• Technological trends: LFP batteries remain dominant for safety; sodium-ion batteries emerging for entry-level EVs (potentially reducing lithium demand and impacting suppliers like Ganfeng Lithium).
• Company responses:
  • BYD’s Blade Battery ensures low compliance cost.
  • CATL investing in sodium-ion tech.
  • NIO, XPeng, Li Auto may face margin pressure without in-house batteries.
  • Great Wall Motors may pivot to LFP/sodium-ion.
• Industry implications: Accelerated consolidation, safer battery innovation, diversified supply chain, enhanced global competitiveness.

Conclusion: Investment Strategy and Outlook

The Chinese auto sector is at a crossroads, with electrification, technology upgrades, and new safety regulations reshaping the landscape. OEMs continue to outpace component suppliers and dealers, enjoying greater bargaining power and expanding into new international markets. Among listed stocks, BYD, Geely, and XPeng are favored for their innovation, scale, and global ambitions. Investors should closely monitor regulatory changes, product cycles, and the evolving competitive dynamics as the industry pushes toward higher safety, efficiency, and market share.