China Auto Sales Surged in June Amid Intense EV Competition
By Reuters | 08 Jul, 2025

Even Tesla showed growth in June with its refreshed Model Y as China's carmakers resorted to extreme measures to stand out among a vast field of EV makers.

A carrier trailer transports newly manufactured cars at a port in Dalian, Liaoning province, China May 21, 2019. REUTERS/Stringer/File Photo

China's car sales rose in June for the fifth straight month, but reports by some major electric vehicle makers of easing demand raised concerns about intensifying competition in the world's largest auto market.

Sales grew 18.6% in June year-on-year to 2.1 million vehicles from a 13.9% rise in May. First-half sales were up 11.2% to 11.1 million vehicles, data from the China Passenger Car Association showed on Tuesday. 

EV and plug-in hybrids sales, making up 52.7% of total car sales, increased a hefty 29.7% in June from a year earlier, up from 28.2% in May. 

But local EV giant BYD saw car sales growth slow to 11% from 14.1% in May. Li Auto, which along with BYD are the only two listed Chinese EV makers with full-year profitability, logged a 24.1% sales decline last month, reversing a 16.7% rise in May.

Geely Auto raised its 2025 sales target by 11% to 3 million units, but its sales growth eased to 42% from 46% in May.

The cooling or falling sales pointed to "a big dilemma" facing the industry, as any escalation into "a life-or-death competition could put some at risk of being eliminated," said Cui Dongshu, secretary-general of CPCA.

Warning the industry of excessive competition, Chinese regulators have called on automakers to halt a growing price war, which is heightening worries about overcapacity amid weak domestic demand and U.S. tariffs.

Concerns about oversupply persist, as scepticism over car sales grows with reports of new vehicles being shipped overseas as "used" since 2019, according to a Reuters report in late June.

Setting itself apart from industry-wide oversupply woes, Xiaomi, an emerging competitor to Tesla, received exceptionally strong orders for its second EV, the YU7 sports utility vehicle, which went on sale last month.

Tesla's China sales swung to a 3.7% increase last month from a 30% fall in May, in the wake of its fastest-ever model ramp-up with just six weeks to full production of the refreshed Model Y in its Shanghai plant.

Car exports rose 23.8% in June from the year before, against a 13.5% increase in May, CPCA data showed.

(Reporting by Qiaoyi Li, Zhang Yan and Brenda Goh; Editing by Andrew Heavens and Kim Coghill)