If 2024 was the year in which traditional foreign automakers were shown the exit from the Chinese car market, 2025 seems to be the year in which some local electric car manufacturers can consolidate their leadership position. “In China, (new energy vehicle) leaders like BYD are likely to further solidify their market position while foreign brands decline,” Nomura said in a 2025 global automotive outlook released Dec. 4. They noted that BYD has already gained 16%. of the entire Chinese automobile market (as of October this year) – compared to 12% in 2023. This is evident from the unit figures for the current year. The Hong Kong-traded automaker is Nomura’s first choice for the Chinese auto market. Analysts rate BYD a Buy, with a price target of 375 Hong Kong dollars ($48.20), up just over 3% from Friday’s close. BYD’s third-quarter sales exceeded Tesla’s for the first time on a quarterly basis. The Chinese automaker produced more cars than Elon Musk’s automaker for the second year in a row in 2023. Tesla still made more battery-only cars than BYD, whose hybrid vehicles account for at least half of its sales. But the US electric car company sells in a much higher price range than most BYD models. According to CNBC calculations from China Passenger Car Association Data, Tesla’s sales in China fell 4.3% in November compared to a year earlier, while BYD saw a 67% increase. According to Nomura, BYD is so far ahead of its competitors that the second largest player after China, Geely, only has 8%. HSBC analysts raised their price target on Hong Kong-traded Geely Automobile to HK$19.30 in late November, nearly 31% higher than Friday’s closing price. The company rates the stock a “buy.” “We believe the company is on track to exceed its full-year target of 2 million units, with electric vehicle penetration expected to reach 40%, supported by strong performance from newly launched models,” HSBC analysts said. They expect Geely to increase sales next year by 22% to 2.6 million units. Geely owns US-listed electric car company Zeekr and other car brands including Swedish brand Volvo, which the Chinese company acquired from Ford in 2010. Other traditional automakers, both domestic and foreign, are struggling in China as the world’s largest auto market has rapidly shifted toward all-battery and hybrid cars. General Motors announced last week that it was restructuring its joint venture with SAIC Motor Corp. in China is expected to cost billions. The changes include plans to close plants. As of October, SAIC GM Wuling, a local GM joint venture, had 3% of China’s auto market for the year, according to Nomura. According to the data, the company held 6% of the new energy vehicle segment. Chinese electric car startups still only make up a fraction of the domestic market compared to top players BYD and Geely. One of the companies recommended to buy by Citi analysts is Hong Kong-listed Yongda, which has operations for several brands of new energy vehicles in China, including Huawei’s Aito. While the Chinese smartphone and telecommunications giant has emphasized that it does not make cars, Huawei has partnered with traditional automakers to sell pure battery-powered and hybrid-powered vehicles that feature an in-car entertainment system, driver assistance technology and other software. Citi analysts said that after discussions with Yongda management on December 4, cars equipped with Huawei’s automotive system could reach one million units sold next year, above the internally forecast 700,000 units sold. According to Citi, Yongda expects the total number of Huawei-authorized deals to exceed 20 by early next year, up from 8 currently. The company has a price target of HK$2.98 for Yongda, an increase of nearly 47% from the close on Friday corresponds. Citi said Yongda also runs electric car businesses for Xiaomi and Xpeng. Among publicly traded Chinese electric car startups, Citi analysts gave Nio and Leapmotor a “buy” rating, but not Xpeng or Li Auto, both of which were rated neutral. Citi said in a report in late November that Hong Kong-listed Leapmotor spends more efficiently on research and development than its rivals, at about 7,400 yuan ($1,017) per car. In contrast, Xpeng spends 25,900 yuan, Nio spends 26,900 yuan and Li Auto spends 21,000 yuan, according to Citi. Analysts increased their price target on Leapmotor to HK$45.10 from HK$44.20, almost 62% above Friday’s closing price. Citi expects U.S.-traded Nio shares to nearly double from current levels to $8.90. In a meeting with Nio on December 3, Citi said the company aims to break even at the group level in 2026, including by limiting research and development spending increases to less than 10% per year and increasing car deliveries . According to the Citi report, the company aims to increase sales of its premium brand Nio by 10% to 20% next year and increase sales of its recently launched cheaper brand Onvo to 20,000 per month in March. After launching two new SUVs in the second half of next year, the automaker expects Onvo monthly sales of 30,000 to 50,000 vehicles, Citi said.
