The automotive industry in 2024 has seen the domestic brands rise dramatically, leaving many to reconsider their previous perceptions of the sector dominated by joint venturesThe landscape of China's automobile market is evolving rapidly, with local brands innovating and competing fiercelyThis year has been marked by breathtaking advancements in technology and intense market rivalry, a true theatre of triumphs and failures.

As the new year started in 2025, major automotive companies released their performance reports, showcasing a split between those thriving and those strugglingBYD, a significant player in the new energy vehicle (NEV) sector, led the charge with exceptional sales figuresIn December alone, Tesla sold 514,800 vehicles, culminating in an impressive total of 4,272,100 vehicles sold over the year, which was a staggering 41.26% year-over-year increase—far surpassing its initial sales targets

This remarkable growth wasn't merely numerical; it also underlines BYD's strategic shift towards intelligence in vehiclesChairman Wang Chuanfu forewarned in 2018 that the second half of the NEV revolution would pivot towards smart technologiesToday, BYD's DiLink smart cockpit system stands as a benchmark in the industry, establishing China's edge in automotive intelligence on a global scale.

Another brand to watch is Chery, which not only increased its sales to 2.6 million units in 2024, reflecting a robust 38.4% growth, but also made strides in digital transformation and eco-platform developmentWith a suite of platforms such as Haixingyun, Ruijing, Ruixiang, and Ruixuan, Chery has reshaped its approach to the automotive supply chain, industrial procurement, and user services, leaving a mark of quality across its operations.

However, with vivid success stories come cautionary tales

While BYD and Geely flourished, industry giants like SAIC and GAC faced devastating declinesSAIC Group's sales plummeted by 20.07% to 4.01 million units, marking the end of its 18-year reign as the champion of China's automotive marketGAC faced a similar fate, with projected sales drops exceeding 20%. Even FAW Group, heavily reliant on FAW-Volkswagen, fell short of its annual objectives as sales for its consortium sagged considerablyGreat Wall Motors, while enjoying a substantial net profit, saw its sales climb just 0.21%—a lackluster figure in such a vibrant market.

The challenges these traditional automakers face can be largely attributed to their overreliance on joint ventures, which have stifled their innovationAs competition intensified and these partnerships faltered, they found themselves caught in a substantial downturnThe struggles of FAW-Volkswagen have spotlighted weaknesses in diversification strategies and resilience during challenging market conditions.

Conversely, new entrants into the vehicle sector, referred to as the “New Forces,” made headlines with record-breaking sales figures

Companies such as Nio, Li Auto, and Xpeng have distinguished themselves in the competitive landscapeLi Auto achieved annual sales of 500,000 units, while Leap Motor approached 300,000, and Nio registered a significant 38.7% increase, hitting 220,000 vehiclesXpeng also rebounded in 2024, arriving at a total of 190,000 units sold.

These new automotive players, however, face their own set of trials amidst escalating competitionBehind the sales records lies an ongoing financial strain, with many brands grappling with sustained operational lossesComparing 2024 with previous years, this year could indeed serve as a pivotal moment in the evolution of Chinese automotive industry, starkly delineating those who succeeded and those who collapsed.

The competition was ferocious, characterized by an intense price war that seemed relentless throughout the yearThe battle began shortly after the Lunar New Year celebration, with BYD declaring that their electric vehicles would be cheaper than gasoline-powered ones

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One of the earliest salvos in this war snowballed throughout the year, leading firms like Tesla, which lowered the price of its Model Y in November by another ¥10,000, to insist suppliers cut costs by as much as 10% next yearMarch saw GAC Aion’s AION Y Plus dipping into the ¥100,000 range, Xpeng offering limited-time discounts of ¥20,000 across its models, and Geely budgeting ¥2 billion for subsidiesChery also threw its hat in the ring with a hefty ¥10 billion replacement cash-back offer.

This whirlwind of competitive tactics had its short-term victories; companies such as BYD claiming a grand total of 3.757 million units sold by November, eclipsing previous champions VolkswagenYet examining the industry on a broader scale reveals severe long-term ramificationsFrom January to October, the automotive industry reported a total profit of approximately ¥375.8 billion, down 3.2% compared to the previous year, with an average profit margin of only 4.5%, signaling a historical low

Dealers coping with tight cash flow face daunting operational challenges, particularly within the luxury segment of cars priced above ¥300,000. The market exudes a sense of chaotic struggle, where merely exerting minimal effort could lead to one’s brand being outperformed or obliterated altogether.

Amidst this turmoil, some automotive leaders, like Great Wall's Wei Jianjun, argue that development in the industry should be steady and calculated, akin to pacing oneself in a marathon, emphasizing the need to maintain a strategic focus without succumbing to the anxiety of competitive pressuresFurthermore, the central economic work conference issued mandates to mitigate “involutionary” competition and regulate both local government and enterprise behavior—setting a clear course for the automotive landscape in 2025.

Despite the clouds of heated competition, the Chinese automotive sector is not standing still

With breakthroughs in technologies such as 5G and artificial intelligence, the transition toward smart vehicles has opened up new avenues of opportunityMultiple brands have made substantial investments in technological innovation, yielding promising resultsFor instance, Changan Automobile began its third entrepreneurial phase in 2017, transitioning from a conventional manufacturing firm to a low-carbon smart mobility tech company, aiming to achieve production and sales reaching ⁠two million units eventually by 2025.

Moreover, the Hongqi brand is prioritizing its innovative technological frameworks to deliver enhanced safety and intelligent travel experiencesWith its flagship electric SUV, the Hongqi Sky 08, positioned as a potential contender in the premium EV market, expectations are high for its performance in upcoming years.

Against the backdrop of this resurgence of domestic vehicles, standout models have also emerged

The Xiaomi SU7, a project spearheaded by Lei Jun, delivered impressive sales with around 130,000 units recorded within eight months post-launch, capturing attention with close to 260,000 ordersEsteemed figures in the automotive industry, including Ford CEO Jim Farley, have expressed admiration for it, while experts, including Professor Yamamoto from Nagoya University, have conducted comprehensive analyses of its technology.

Furthermore, models such as the AITO M9 have solidified their positions within the luxury market, achieving pricing starting at ¥460,000 and steadily securing over 200,000 firm ordersRespected for its impressive sales performance, the model has consistently held the title of the best-seller in the luxury SUV segment priced over ¥500,000 for eight consecutive months.

The aggressive new high-end vehicles, like the Zenith S800, launched with a pre-sale price ranging from ¥1 million to ¥1.5 million, creating significant buzz with over 2,108 pre-orders within merely 48 hours of opening online reservations

Estimates suggest that initial deposits alone generated approximately ¥40 million for Horizon ZhiXing during the same timeframe.

All the while, BYD's ATTO 3 is making waves in foreign markets, garnering top sales figures across a range of countries including Thailand, New Zealand, Israel, and BrazilIts operational reach has expanded to over 70 countries and regions, with a cumulative export tally surpassing 140,000 vehiclesAdditionally, its elite brand, the Yangwang U9, achieved a staggering high-speed test of 375.12 km/h in August 2024, breaking records for domestic electric supercars and solidifying its status in the high-performance sector.

The spotlight also shines on Xiaopeng’s “land carrier” split-body flying car, generating anticipation as it is set to begin pre-sales in December 2024, with plans for deliveries to launch in the first quarter of 2026. This innovative vehicle made quite an impression at the GITEX exhibition in Dubai, leaving guests—including the Dubai Civil Aviation Authority chair—thoroughly captivated.

Such achievements underline the ongoing commitment of Chinese automotive companies to invest in research, development, and to remain attuned to market dynamics

As the industry transitions from traditional manufacturing to intelligent vehicles, from the trenches of price wars to the peaks of technological advancement, it’s clear that players from various sectors, including tech giants like Xiaomi and Huawei, are diving headfirst into the automotive arena, while established brands like Hongqi and Chery are rejuvenating themselves with fresh vigor.

Reflecting upon the automotive narratives of 2024 reveals a landscape where the surge of domestic brands has unseated joint ventures, while fierce competition among new energy automotive players has sparked serious debates about sustainability and profitability in a tightening marketWith robust support from the government in the form of new energy vehicle policies and financial incentives, the groundwork for sustainable growth has been firmly laid.

Looking forward to 2025, as the government pushes for trade-in incentives and actively engages in stimulating consumption, we may witness a definitive shift, cementing new energy vehicles as the industry's mainstream choice