Key Takeaways
- NEVs are the majority: September retail penetration of new energy vehicles is hovering around ~60% of passenger-car sales, reinforcing that electrified models are now the default in China.
- NIO breaks records: 34,7k September deliveries — a new monthly high — as NIO (premium), ONVO (family)and Firefly (compact) combine to broaden reach and price bands.
- BYD goes global: Management is targeting ~20% of 2025 sales from exports (≈ 0.8–1.0m units), using localized assembly and logistics to cushion tariff shocks.
- Price war persists: Discounts remain intense across BEV and PHEV segments; margin preservation hinges on mix, software attach and battery cost relief.
- Policy overhang: Fresh U.S. tariff talk and the EU’s EV duties keep headline risk elevated into year-end.
Market Pulse: September Snapshot
China’s passenger-vehicle retail improved sequentially into the autumn selling season. Within that, NEVs (BEV + PHEV) extended their structural outperformance, lifting market share toward ~60%. The sweet spot remains the ¥100k–¥200k price band where domestic brands teem with fast-refreshing crossovers and sedans. For international OEMs, the implication is stark: ICE is the minority; electrified value propositions must carry the line-up.
NIO: Multi-Brand Strategy Starts to Bite
NIO’s September deliveries hit an all-time high (~34.7k), up smartly year-on-year. The three-brand portfolio is doing the heavy lifting:
- NIO (premium smart EVs): sustaining brand equity and high-spec ASPs.
- ONVO (family segment): scaling quickly into the mass NEV mainstream.
- Firefly (small/compact): unlocking entry points and city-car demand.
What to watch next:
- Margin bridge as ONVO/Firefly scale (factory utilization, BOM savings).
- Software & services attach (AD features, energy, subscriptions).
- Export cadence and homologation for Europe and emerging markets.
BYD: Export Hedge vs. Home-Turf Price War
BYD continues to balance domestic share with overseas volume, guiding for ~0.8–1.0 million exports in 2025. That strategy lowers reliance on China’s relentless discount cycle and leverages BYD’s vertical integration (battery, power electronics, in-house platforms) to protect unit economics abroad. Expect more:
- Localized assembly/CKD footprints to mitigate tariffs.
- Dedicated logistics (chartered carriers) to smooth delivery waves.
- Segment breadth from entry BEVs to hybrids and premium-adjacent trims.
Watchpoints into Q4: export mix to Europe/LatAm/MEA, any EU price undertakings or localization pivots, and the pace of new model launches in the ¥120k–¥180k bracket.
Policy & Trade: Tariff Chatter Keeps Volatility High
- United States: New 100% tariff threats reintroduce tail-risk for China-made autos and components. Even without immediate implementation, automakers are scenario-planning for higher landed costs, licensing/regulatory friction, and potential supply-chain reroutes.
- European Union: Additional EU duties on China-built EVs remain in force while Brussels and Beijing explore workarounds (e.g., minimum-price undertakings). Net-net, the current structure still allows cost-competitive Chinese exports, especially for scale players like BYD—keeping pressure on European incumbents.
Competitive Dynamics: Pricing, Mix, and Tech
The price war that began in 2023 never truly ended. The winners now are those who can:
- Refresh product faster (12–18-month cycles),
- Drive BOM deflation (battery chemistry, die-casting, integration), and
- Monetize software/services to lift lifetime value.
NIO is leaning on brand tiering and software, BYD on scale and verticality. International rivals increasingly push PHEVs and lower-trim BEVs to bridge price gaps and defend share.
What to Watch Next (Q4 2025)
- Golden Week sell-through: Inventory normalization after promotions.
- NIO margin cadence: ONVO/Firefly mix vs. premium NIO ASPs.
- BYD export lanes: Europe/LatAm shipments, any port/logistics bottlenecks.
- EU–China dialogue: Signs of price undertakings or localization deals.
- Battery inputs: Lithium/nickel price trends and next-gen LFP/LMFP rollouts.
Quick Data Box
- NEV retail share (Sep): ~58–59%
- NIO Sep deliveries: ~34,749 (record)
- BYD 2025 exports (target): ~0.8–1.0m (~20% of sales)
- Domestic backdrop: Discounts persist; software attach and export mix are the key margin levers into Q4.
FAQ
Is NIO’s surge just hype or sustainable?
Sustainability hinges on brand mix and margins. ONVO and Firefly bring scale, while core NIO protects premium ASPs. Watch the software attach rate and the cost curve as volumes ramp.
How exposed is BYD to EU tariffs?
BYD’s cost position and breadth give it room to price competitively even with duties. The company is also pushing local assembly and diversified export routes to hedge policy risk.
Do tariffs derail China’s EV exports overall?
They raise friction, but scale players still find profitable lanes—via pricing power, localization, or product mix. A sudden U.S. escalation would be more disruptive than the current EU setup.
Where does this leave foreign OEMs in China?
Competing on value and speed, not just brand. PHEVs and competitive BEVs are essential, with software and service ecosystems to defend margins.
Disclaimer
This article is for informational and journalistic purposes only and does not constitute investment advice or a solicitation to buy or sell any security. Market conditions, company strategies, and policy decisions can change quickly. All data reflect information available as of October 12, 2025 (London/Berlin).
