China’s Electric Car Boom Expected to Slow Down by 2025 Amid Market Changes

Analysts predict a significant slowdown in China’s electric vehicle sales by 2025, impacting many companies in the industry.

China’s Electric Car Boom Expected to Slow Down by 2025 Amid Market Changes
China’s Electric Car Boom Expected to Slow Down by 2025 Amid Market Changes

Beijing: China’s electric car market is gearing up for a slowdown in 2025. Analysts are saying this could put a lot of pressure on companies trying to stay afloat.

Last year, sales of new energy vehicles jumped by 42%, hitting nearly 11 million units. BYD, the market leader, saw its sales soar by over 40%, reaching almost 4.3 million units. They had aimed for at least 20% growth, so they really knocked it out of the park.

But looking ahead, HSBC analysts are forecasting only a 20% increase in sales this year. They expect BYD’s growth to slow to around 14%. It seems like the strong sales have allowed some struggling companies to hang on, but margins are getting tighter. Only a few companies, like BYD, Tesla, and Li Auto, managed to turn a profit last year.

Yuqian Ding from HSBC mentioned that this situation can’t last forever. She believes the industry will see a lot of consolidation soon. The mix of subsidies and incentives has helped the electric vehicle market grow quickly, but things are changing.

For instance, Appotronics, a company that started making in-car projector screens, shipped over 170,000 units last year. However, they expect similar sales in 2025 and think the market won’t bounce back until 2026. Their CEO pointed out that many automakers are struggling financially, which is affecting their research and development budgets.

As more companies entered the electric car market, a price war broke out. Xiaomi even launched its electric sedan at a lower price than Tesla’s Model 3. When big players like BYD and Tesla cut prices, others had to follow, squeezing profits across the board.

With new energy vehicles making up over 50% of new car sales, growth is likely to slow to 15% to 20% in 2025. Analysts believe that smart features will become a key selling point as automakers look for ways to differentiate their vehicles.

While the market cools, Appotronics is planning to introduce a 4K projector for cars this year. They’re also working on new laser-based technologies for headlights and are in talks with Tesla about a projector for future vehicles. It sounds like they have some exciting plans ahead!

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