Of hundreds for a few dozen. Stella Li, BYD‘s executive vice president, vatcine the end of most Chinese brands.
The alert came from Munich, but has China as an epicenter. Stella Li, BYD’s executive vice president, left no doubt: “The market will have to eliminate many (manufacturers). Even 20 car producers is already too much,” said one of BYD’s most sleepless voices in Europe, on the sidelines of the Munich Salon (IAA 2025).
A statement that does not arise in the emptiness. The Chinese government went on a red alert and decreed a brake on the discounts that came to support the price war between local brands. An argument without which dozens of Chinese brands may not resist. “Unable to offer discounts to attract customers, some builders will not resist,” said the BYD official.
The End of Price War
Beijing’s decision arises in a context of excessive productive capacity and deflationary pressure. The phenomenon, known internally as neijuan (“Involution”), became a direct target of President Xi Jinping’s campaign, who wants to crash a race that in 2024 led 129 brands to sell electric or hybrid cars in China.
But most are doomed. According to consultant AlixParters, only 15 of these companies will have financial viability by 2030. Competitor XPEGG was even further, providing for the global automotive sector to be reduced to only 10 manufacturers in the next decade.
The giants also tremble
Despite leading in sales and competing with Tesla the status of the world’s largest electrical manufacturer, BYD also feels the pressure. In the second quarter, it recorded revenues and profits below expected, direct result of Beijing’s repression to extended payment deadlines to suppliers and discounts.
Banco Citi predictions reflect the impact. BYD’s annual sales estimates were reviewed down: 5.8 million units to 4.6 million in 2025 from 7.2 million to 5.4 million by 2026 and from 8.4 million to 6.0 million by 2027. We recall that by 2024 sold 4.3 million vehicles.
Still, Stella Li ensures confidence in the company’s solidity and reinforces that expansion outside China will be inevitable: “I think you will see more Chinese brands abroad, but the foreign market is not so simple.”
Europe on the horizon and US behind the mountain
BYD has reinforced its presence in Europe with affordable models and advanced technology. The BYD factory in Hungary will start production later this year from the Dolphin Surf model, although the brand recognizes that the increase in scale will be gradual. It will be the first model of this Chinese brand produced in Europe.
Other Chinese builders follow the same path. Changan has already hit the European market and Leapmotor, through partnership with Stellantis, will produce the B10 Electric SUV in Spain.
In the opposite direction, the US automotive market is armored by high tariffs at the entry of Chinese vehicles. A “mountain” that so far the Chinese government has not been able to climb or overthrow.
The alternative has been a bet on the South American market, a destination where several Chinese brands have driven hundreds of thousands of units every year.
