Chinese electric vehicle (EV) firm BYD said demand for its second-generation blade batteries currently outstrips existing capacity, as Chinese cars gain popularity around the globe. Geely Chairman Li Shufu said the company would assess the oversupply of capacity across all units.
At BYD’s annual general meeting in Shenzhen, Chairman and President Wang Chuanfu told shareholders that its Blade Battery 2.0 and Flash Charging technology had received a warm response in domestic and overseas markets, but that battery cell production remained insufficient to meet demand. BYD was increasing its battery production capacity by 20,000 units to 30,000 units per month, Wang said, adding that this year’s sales volume would be subject to the supply of its latest batteries. “Once our battery production catches up next year, we are confident that both domestic and international markets will see strong growth,” he said.
The Shenzhen-based company started mass production of its second-generation Blade Battery in early March, which it said was able to charge from 10% to 97% in nine minutes, initiating a charging speed war among domestic battery makers including Contemporary Amperex Technology Ltd. (CATL) and CALB Group. BYD also started using the new battery and charging technology in at least 12 of its models, which led to a shortage of battery cells, Deutsche Bank said, causing waiting times of four to five weeks for the company’s Denza Z9 GT sedans, the first model to include the new technology. Thanks to the fast-charging batteries, BYD’s sales volume in May increased 0.26% to 383,453 units, ending eight months year-on-year declines.
The increase in May reversed the decline in the domestic market, where retail sales dropped 7.5% to around 950,000 vehicles year-on-year due to the abolition of subsidies in January. Squeezed by reduced government incentives, BYD had a slow start to 2026, with its monthly EV sales sinking below 200,000 units in February for the first time in nearly two years and first-quarter net profit plunging 55% year-on-year. With the capacity ramp-up, BYD’s car sales were expected to grow 6% to 4.9 million units this year, according to Deutsche Bank, which added that BYD would book CNY10 million second-quarter net profit, a big jump of 59% year-on-year.
Yale Zhang, Managing Director at consultancy Automotive Foresight in Shanghai, said that any improvement in next year’s sales could be minor compared with this year given increased competition and a potential fall in oil prices. At the shareholders’ meeting, BYD Chairman Wang said he expected “dual-engine growth” in both domestic and overseas markets, bolstered by the new technologies to be launched in the coming two years that would enable “Chinese technologies to reach a global audience”. The sales increase in export markets was expected after the carmaker had shifted its focus to the export market to compensate for weakening domestic demand. Overseas sales in May surged 80% year-on-year to a record high 160,644 units, the South China Morning Post reports.
Geely Auto, which is locked in a fierce battle with BYD for dominance in China’s crowded automotive market, plans to purge excess capacity through an asset restructuring while ramping up its go-global drive with an eye on greater international competitiveness.
Chairman Li Shufu said during the Chongqing Auto Show that the Hong Kong-listed carmaker would assess the oversupply of capacity across all units to determine whether to close, suspend, merge or sell redundant production facilities. “Geely Auto is determined in its resolve to achieve sound corporate development by concentrating our superior resources on a vertically integrated automotive group,” he said in a video clip posted online. “By doing so, we will transform Geely into a strong and large carmaker with advantages in systemic development, corporate governance and global competitiveness.” While Geely’s billionaire founder did not reveal specifics, such as the number of plants or the scale of excess capacity that could be disposed of amid the asset revamp, the move signals a strategic pivot for the Hangzhou-based manufacturer.
Geely operates a diverse stable of brands, including Zeekr, Lynk & Co, and Galaxy. The company, which sells both petrol and electric vehicles (Evs), unseated BYD as China’s largest carmaker in the first quarter of this year, but dropped back behind BYD in April and May as a global energy crisis spurred demand for fully electric vehicles. Geely Auto’s net income for 2025 rose 1.7% from a year earlier to CNY16.6 billion. Revenue jumped 25% to CNY345.2 billion, and deliveries jumped 39% to 3.02 million units.
Li Shufu also indicated that he had been mulling a new growth strategy for Geely Auto and vowed to map out a formal succession plan, without elaborating. Geely Auto’s parent company, Zhejiang-based Geely Holding Group, also owns Volvo Cars and holds a stake in Mercedes-Benz Group. Betting on its technological prowess in EVs, Geely has quickened the pace of its international expansion over the past two years, with plans to utilize space vacated by international brands to build its cars. In November, the firm and its parent bought a 26.4% stake in Renault Group’s Brazilian operations. At the end of 2025, the company opened a massive safety-testing facility in Ningbo in Zhejiang province. In February, Geely said that it would focus on extending driving range and improving charging speeds rather than cutting prices to defend its position in China. Its overseas sales – including both petrol and electric vehicles – jumped 158% year-on-year, to 371,354 units in the first five months of 2026, representing nearly a third of total deliveries. China’s output of vehicles – including buses, lorries and passenger cars – rose 10.5% to 34.5 million units in 2025, according to the China Association of Automobile Manufacturers (CAAM), the South China Morning Post reports.
Electric vehicles accounted for a record 66.7% of new car sales in China during the first week of June, up from 62.9% in May. “The Middle East conflict has given Chinese EV makers an unexpected shot in the arm,” said Eric Han, Senior Manager at Shanghai consultancy Suolei. “Petrol cars may have run out of steam,” he said. EV deliveries in China exceeded 152,000 units between June 1 and 7, up 8% from the corresponding period a month earlier, according to the China Passenger Car Association (CPCA). In May, no Chinese petrol-car brand ranked among the country’s 10 bestselling vehicle models, a first for the market. Foreign carmakers held a combined 30.3% share of the Chinese market in April, down from 34.7% for full-year 2025. Deutsche Bank forecast in January that total vehicle sales in China – including both EVs and petrol-powered cars – would decline 5% this year, while UBS projected a 2% fall, citing overcapacity and reduced government support.
