China Autos & Shared Mobility_ 2025 - Bridging EVs to an autonomous future

Summary: This document provides an in-depth analysis of the Chinese automotive industry, focusing on key trends, forecasts, and investment opportunities. It covers various segments, including EVs, traditional OEMs, supply chains, dealerships, and OEM reforms. The report highlights the following key points: 1. EV Market Growth: * China's EV market is expected to grow significantly, with wholesales reaching 28.3 million units in 2025. * Local brands are gaining market share, with a projected 70% market share in 2025. * PHEVs are becoming increasingly popular, with a projected 48% mix in 2025. * Global OEMs are losing market share due to intense competition and price wars. 2. Traditional OEMs: * Geely is preferred due to its strong EV lineup and exposure to replacement demand. * SAIC and GAC are facing challenges, but reforms and partnerships could improve their prospects. * SOE OEM reforms are expected to gain momentum, with potential for improved profitability and efficiency. 3. Supply Chain: * Smart driving technology is gaining traction, benefiting hardware providers like Horizon Robotics. * China suppliers are expanding overseas, driven by global EV supply chain decoupling. * Hesai is downgraded to Equal-weight due to its significant rally since November 2024. 4. Dealerships: * Dealerships are shifting from global luxury brands to Chinese EVs. * Zhongsheng is preferred due to its strong bargaining power and customer base. * Yongda and Meidong are downgraded to Equal-weight due to their exposure to luxury brands and potential for margin pressure. 5. OEM Reforms: * SAIC and GAC are undergoing reforms to improve efficiency and profitability. * Chang'an is a successful example of SOE reform. * SAIC and GAC H-share are preferred due to their unique advantages. Investment Opportunities: * EVs: XPeng, ZEEKR, Li Auto, and NIO are expected to benefit from significant operating leverage and potential profit turnaround. * Traditional OEMs: Geely is preferred due to its strong EV lineup and exposure to replacement demand. * SOE OEM Reforms: Chang'an, SAIC, and GAC H-share are preferred due to their potential for improved profitability and efficiency. * Supply Chain: Horizon Robotics is preferred due to its strong ADAS solutions and market position. * Dealerships: Zhongsheng is preferred due to its strong bargaining power and customer base. Conclusion: The Chinese automotive industry is undergoing significant transformation, driven by the rapid growth of EVs and technological advancements. This presents both challenges and opportunities for various stakeholders. Understanding the key trends and investment opportunities is crucial for navigating this dynamic landscape.