Summary of the China Passenger Vehicle Monthly Chartbook - December 2025 Industry Overview - The report focuses on the **passenger vehicle (PV)** and **new energy vehicle (NEV)** industry in China, highlighting trends in retail and wholesale volumes, inventory levels, pricing, and battery prices [1][2][5]. Key Industry Trends - **NEV Retail Growth**: NEV retail growth decelerated to **+3% year-over-year (yoy)** in December 2025, down from **+4% yoy** in November 2025, attributed to decreasing subsidies [1][5]. - **ICE Decline**: Internal combustion engine (ICE) vehicle sales further deteriorated, showing a decline of **-31% yoy** in December, compared to **-22% yoy** in November, with higher ICE inventory levels [1][5]. - **Export Growth**: Exports of passenger vehicles (PV) and NEVs showed significant strength, with growth rates of **+47% yoy** and **+164% yoy** respectively in November, compared to **+41% yoy** and **+67% yoy** in October [1][5]. Detailed Industry Data - **December 2025 Highlights**: - PV retail sales decreased by **-14% yoy** and increased by **+2% month-over-month (mom)**. - Wholesale sales for PV decreased by **-9% yoy** and **-7% mom**. - NEV retail sales increased by **+3% yoy** and **+1% mom**, while wholesale sales increased by **+3% yoy** but decreased by **-8% mom**. - NEV retail penetration reached **59.1%**, an increase of **9.7 percentage points (pp) yoy**, while wholesale penetration was **56.0%**, up **6.8 pp yoy** [5][6]. Pricing and Inventory Trends - **Inventory**: NEV inventory remained stable, while ICE inventory levels increased [5][6]. - **Pricing**: Dealer discounts for both NEVs and ICE vehicles narrowed month-over-month, with one NEV manufacturer implementing a price cut [6]. - **Battery Prices**: Lithium cobalt oxide (LCE) battery prices increased by **+32% mom**, while lithium iron phosphate (LFP) and nickel-cobalt-manganese (NCM) battery prices remained flat [6]. Company Highlights - **BYD**: - Delivered **133,000 units** of export volume in December 2025, maintaining strong overseas expansion momentum. - Expected overseas sales volume to reach between **1.5 million to 3.5 million** units from 2026 to 2035, driven by NEV penetration and product competitiveness. - Forecasted **30% earnings compound annual growth rate (CAGR)** from 2025 to 2028, with overseas profit contribution expected to rise from **21% in 2024 to 60% by 2028** [6][7]. - **XPeng**: - Delivered **32,000 units** of domestic retail volume in December 2025, reflecting a **-5% yoy** decline but a **+2% mom** increase. - Market share remained relatively stable with a **-0.2 pp** change. - Blended transaction price increased by **5% yoy** and **4% mom**, attributed to a favorable model mix [7]. Future Outlook - Domestic PV and NEV volume growth is expected to slow down in 2026, with projections of **-2% yoy** for PV and **+11% yoy** for NEV, compared to **+4% yoy** and **+18% yoy** in 2025. - Exports are anticipated to be a bright spot for the industry, particularly for companies like BYD, which is well-positioned for overseas exposure [6][7]. Conclusion The December 2025 report indicates a challenging environment for the domestic PV market, particularly for ICE vehicles, while NEVs continue to show growth albeit at a slower pace. Export opportunities remain robust, particularly for leading companies like BYD and XPeng, which are expected to capitalize on international markets in the coming years [1][5][6][7].