Highlights

• BYD overtook Tesla in full-year battery-electric vehicle sales for 2025, delivering roughly 2.26 million BEVs versus Tesla's ~1.64 million, marking China's shift from domestic champion to global EV pace-setter.
• Chinese auto exports are surging, hitting 6.343 million units through November 2025 (+18.7% YoY) with projections exceeding 7 million for the year, as manufacturers lean on foreign markets to absorb massive overcapacity.
• The EV market is entering an 'elimination round' where survival depends on cash flow and gross margins rather than volume alone, with intense pricing pressure creating clear winners and strugglers among Chinese automakers.

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China’s major automakers opened 2026 by posting their 2025 sales results, and the headline is a market splitting into winners and strugglers: scale leaders are pulling away, while many companies are missing targets or discovering that volume growth doesn’t automatically translate into profits, as Rare Earth Exchanges™ has called out. The most symbolic datapoint: BYD overtook Tesla in full-year battery-electric (BEV) sales, with roughly 2.26 million BEVs delivered versus Tesla’s ~1.64 million, cementing BYD’s shift from a China champion to a global EV pace-setter.

Why is the EV Space Important to Monitor

Since 2020, battery-electric vehicles (BEVs) have been the fastest-growing category globally, even as growth has become more uneven by region. The International Energy Agency (IEA) reports (opens in a new tab) that electric car sales exceeded 17 million in 2024 (over 20% of global car sales) and notes that the increase in EV sales from 2023 to 2024 (about 3.5 million) was larger than the total number of EVs sold worldwide in 2020—a simple way to see how steep the EV growth curve has been since 2020.

Looking into 2025, the IEA expects EV sales to exceed 20 million (about one-quarter of global car sales) and to grow about 25% year-over-year, which remains far faster than the underlying growth of the overall car market.

Hybrids (non-plug-in HEVs) have also grown quickly—often faster than pure petrol—especially where charging, pricing, or incentives make BEVs harder to adopt—but they generally trail BEVs in global growth rate. And these, too, depend on rare-earth element-based magnets.  In Europe, for example, hybrids have become a dominant “bridge” technology: ACEA’s EU fuel-type tracking (opens in a new tab) shows hybrids rising strongly across 2019–2023, while petrol/diesel shares trend down and “electrically chargeable” vehicles (BEV+PHEV) climb.

In the U.S., the story into late 2025 tilts even more toward hybrids: a Reuters report (opens in a new tab) dated January 4, 2026, describes 2025 U.S. sales rising modestly overall, with gas trucks/SUVs and hybrids driving demand while EV share softened in late-year retail mix. Note that under President Trump’s Big Beautiful Bill, EV and green energy downstream incentives were eliminated.  Net: global winner on growth since 2020 = BEVs; runner-up = hybrids; laggard/decliner in share = petrol (and diesel), which remains large but is not the growth engine.  And that’s a trend Chinese producers are banking on. Again, however, they face what Rare Earth Exchanges refers to as an over-production crisis.              

Chinese Reporting

The story behind BYD’s leap is less about a single hit model and more about system competition—tight cost control, vertical integration, and a broad product portfolio that includes both BEVs and plug-in hybrids. In parallel, legacy Chinese groups are pushing the same playbook: “new energy + overseas expansion.” China’s auto exports through the first 11 months of 2025 hit 6.343 million units (+18.7% YoY), with industry officials projecting full-year exports above 7 million, a record—an unmistakable signal that China is leaning on foreign markets to absorb capacity.

Company-by-company, the “target completion rate” tells the real story: some, like Geely, reportedly cleared goals, while others fell short despite strong EV and export growth—evidence of intense domestic competition and pricing pressure. Rare Earth Exchanges has pointed to an over-production crisis across multiple Chinese industries.  

For newer EV brands, 2025’s “elimination round” is evolving from deliveries to cash flow, gross margin, and channel efficiency—in other words, who can survive a price war and still fund R&D. There will be substantial losers within China.

For the U.S. and Europe, the implications are direct: more Chinese exports (where they are allowed into markets), more pressure on Western automakers, and a faster scaling of EV supply chains that depend heavily on rare-earth permanent magnets (NdPr, Dy/Tb) and associated processing—precisely as the West tries to build its own capacity.

Disclaimer: This item is based on reporting carried by Securities Daily via SINA, a Chinese media corporation owned by private company New Wave Holdings Limited, controlled by Charles Chao.

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