Amid intensifying competition among Chinese electric-vehicle (EV) makers last year, relatively inexpensive models from Geely Auto and Wuling Motor Holdings topped the sales chart, surpassing sales by BYD and Tesla. In 2025, Geely sold more than 459,000 units of the Xingyuan EV – priced between CNY68,800 and CNY98,800 – versus 52,570 a year earlier, according to a list of the top-selling battery EV models compiled by the China Automotive Technology and Research Center. It was followed by Wuling’s Hongguang Mini EV, whose sales jumped 55% year-on-year to 427,000 units. Tesla’s Model Y ranked third, although sales fell nearly 21% year-on-year to 382,300 units, indicating intense rivalry among EV makers. BYD’s Seagull, the second-best selling EV in 2024, slid to fourth place in 2025 after sales declined 31% year-on-year to 307,000 units. The car is priced between CNY69,800 and CNY85,800.
China’s policymakers have repeatedly urged carmakers to stop resorting to discounts amid deflationary pressures, urging companies to shift to alternatives like pricing upgraded models at lower levels and rolling out subsidized purchase schemes with payment periods as long as seven years. In mid-February, the State Administration for Market Regulation (SAMR) banned carmakers from selling new cars for less than the cost of production, including through discounts and subsidies, signaling a tough stance in tackling deflationary pressures. Demand for EVs in China plummeted to a concerning level at the beginning of the year, according to Nomura. Monthly sales of passenger EVs stood at 596,000 units in January, a decline of nearly 20% year-on-year, while EV penetration dropped to 38.3%, according to a report by the Japanese bank on February 16, which noted that the phasing out of tax incentives could be one of the factors.
Since January, Chinese EV buyers are subject to a 5% tax, versus zero previously. In 2028, the tax will return to 10%. The stellar sales of the budget EVs could partly be attributed to the upgrades of the low-priced models, with carmakers luring buyers with higher quality vehicles without increasing prices, according to David Zhang, Secretary General of the International Intelligent Vehicle Engineering Association.
Geely’s Xingyuan has a driving range of 310 km to 410 km, versus 305 km to 405 km for BYD’s Seagull, though both have a similar price range. “Chinese EV makers are under pricing pressures despite the regulatory directives,” said Gary Ng, Senior Economist at Natixis Corporate and Investment Bank. “The phase-out of the purchase tax exemption will force some manufacturers to decrease their inventories faster.” But the decline in sales of the Seagull, BYD’s cheapest model, might be a good sign, Ng said, as it seems to be repositioning its business amid a profit squeeze. China’s largest EV seller and one of the few profitable EV makers reported a 32% slump in its third-quarter net profit for 2025, the South China Morning Post reports.
