Data show that sales of major Chinese electric vehicle (EV) manufacturers stumbled in January. Observers say the steep decline was due to the Chinese regime’s manipulation of the economy and quality issues.
The top seller, Hongmeng Intelligent Driving, which is under Chinese telecommunication giant Huawei, saw a 29.28 percent month-on-month decrease in January, with 34,987 new vehicles delivered, according to the January sales data published on Chinese media on Feb. 1.
Xpeng Motors, which ranked second in monthly sales with 30,350 new vehicles sold, saw a 17.3 percent month-on-month decline.
Li Auto delivered 29,927 new cars in January, down 48.85 percent from December 2024. Its ranking dropped to third from the top in 2024, with annual total sales exceeding 500,000 vehicles.
Other major Chinese EV makers also saw significant sales declines, some even more than half. Leapmotor had a month-on-month decrease of 40.8 percent, with 25,170 new cars sold; Xiaomi Auto delivered more than 20,000 new cars, a month-on-month drop of 20 percent; and NIO delivered 13,863 new cars, a month-on-month fall of 55.5 percent.
Among them, Xpeng Motors and NIO have suffered deficits since last year.
He Xiaopeng, CEO of Xpeng Motors, said last December that 2024 was the first year that Chinese EV brands entered the “bloody sea” of competition, which was “the first year of the elimination round.”
Li Xiang, CEO of Li Auto, said that 2025 will mark a turning point in China’s EV market.
The “Vehicle Inventory Alert Index” issued by the China Automobile Dealers Association (CADA) for January showed a 62.3 percent index, up 2.4 percent year-on-year and 12.1 percent month-on-month, respectively, indicating that the industry is in a recession.
The CADA survey showed that 77.7 percent of dealers thought that China’s automobile market in January did not meet expectations. CADA said the sales volume of passenger cars in January reached only 2/3 of that in December last year.
Taiwanese economist Edward Huang told The Epoch Times on Feb. 4 that the latest data show that this year’s demand for EVs in China should be weaker than last year.
“China’s economy is indeed not good, so consumers can’t spend more money to buy new EVs. Everyone thinks that EVs may fall in price in the future, especially since the industry’s internal competition in China is fierce. All these have affected consumers’ willingness to purchase new EVs,” Huang said.
The European Union and the United States have imposed high tariffs on Chinese EVs due to the Chinese regime’s dumping practice and subsidies.
“This may put a lot of pressure on the Chinese EV makers to export their products abroad, which means they have no place to absorb their production capacity,” Huang said. “This is why some executives of companies like Xpeng Motors and other Chinese automakers said that the industry is entering an elimination round.”
The key point is “How long can they last? Of course, we need to observe their marketing and financial figures in the future,” Huang said,
State-controlled mainland Chinese media attributed the double-digit decline in EV sales in January to the Chinese regime’s 2024 subsidy measures. These measures spurred some consumers to replace their vehicles in December, overdrawing part of the 2025 car market.
U.S.-based economist Davy J. Wong said the claim is false.
“China’s economy is declining rapidly. Chinese people’s individual consumption capacity has been seriously overdrawn in the past two to three years,” Wong told The Epoch Times on Feb. 4.
“Whether it is the real estate market or other economic activities, the current situation in China is not optimistic. As for big purchases like cars, there is not so much consumer demand, as people want to save as much as they can.”
Quality Issues
Wong said another reason behind the sales dip of Chinese EVs is concern over their quality.The quality issues of Chinese EVs that have led to fatal accidents have been coming to light in recent years since its initial popularity prompted by the Chinese regime’s subsidies and promotion.
“When the Chinese EVs came out, a lot of people bought them. But after three to five years, quality problems have surfaced. The batteries were easily damaged; accidents happen frequently; a collision will set the Chinese EVs on fire. Many serious traffic accidents are often caused by the quality problems of Chinese EVs and become major accidents. The prices of EVs are falsely high, and the repair services are very expensive. Slowly, consumers begin to realize that Chinese EVs save on fuel, but may cost their lives,” Wong said.
Wong said that the Chinese EV industry is not based on normal market competition but on state subsidies.
Huang concurred, saying that the global demand for EVs is not that great, but China is still desperately producing so many.
“The Chinese regime’s planned economy or predatory economic structure has not changed. I think that this situation with the Chinese EV cannot be sustained for long, and it will definitely become a major drag on the nation’s overall economy,” Huang said.
