If 2024 was the year that traditional foreign automakers were shown the exit on China’s car market, 2025 looks to be the year that a few local electric car companies can solidify their leadership. “In China, [new energy vehicle] leaders such as BYD are likely to consolidate their market position further, while foreign brands fade,” Nomura said in a 2025 global autos outlook published Dec. 4. They pointed out how BYD has already taken 16% of the entire Chinese auto market as of October this year — up from 12% in 2023. That’s according to year-to-date unit sales. The Hong Kong-traded automaker is Nomura’s top pick for the China car market. The analysts rate BYD a buy, with a price target of 375 Hong Kong dollars ($48.20), for upside of just over 3% from Friday’s close. BYD’s revenue in the third quarter topped that of Tesla for the first time on a quarterly basis . The Chinese automaker in 2023 produced more cars than Elon Musk’s automaker for a second-straight year . Tesla still made more battery-only cars than BYD, whose hybrid vehicles account for at least half of sales. But the U.S. electric car company sells in a far higher price range than most of BYD’s models. Tesla’s China sales fell by 4.3% in November from a year ago, while BYD saw a 67% surge, according to CNBC calculations of China Passenger Car Association Data. BYD is so far ahead of its competitors that the second-largest player by China market share, Geely , only has 8%, according to Nomura. HSBC analysts in late November raised their price target on Hong Kong-traded Geely Automobile to 19.30 HKD, nearly 31% higher than where the stock closed Friday. The firm rates the stock a buy. “We believe that the company is on track to exceed its full-year target of 2m units, with EV penetration likely to reach 40%, supported by the strong performance of newly launched models,” the HSBC analysts said. They expect Geely will grow sales by 22% next year to 2.6 million units. Geely owns U.S.-listed electric car company Zeekr and other auto brands, including Swedish brand Volvo, which the Chinese company acquired from Ford in 2010. Other traditional automakers, domestic and foreign, have struggled in China as the world’s largest auto market has swiftly shifted to battery-only and hybrid-powered cars. General Motors in the last week announced it expects to incur billions of dollars in costs as it restructures its joint venture with SAIC Motor Corp. in China. The changes include plans to close plants. SAIC GM Wuling, a local GM joint venture, had 3% of China’s auto market for the year as of October, according to Nomura. The company held 6% of the new energy vehicle segment, the data showed. Chinese electric car startups still only account for a fraction of the domestic market compared to top players BYD and Geely. One of Citi analysts’ buy-rated plays is Hong Kong-listed Yongda , which operates stores for several new energy vehicle brands in China, including Huawei’s Aito. While the Chinese smartphone and telecommunications giant has emphasized it does not make cars, Huawei has partnered with traditional automakers to sell battery-only and hybrid-powered vehicles that include its in-car entertainment system, driver-assist technology and other software. Citi analysts said that according to conversations with Yongda management on Dec. 4, cars running Huawei’s automobile system can reach 1 million unit sales next year, above the 700,000 unit sales forecast internally. Yongda expects total Huawei-authorized stores to exceed 20 by early next year, up from 8 currently, according to Citi. The firm has a price target of 2.98 HKD on Yongda, up nearly 47% from Friday’s close. Yongda also operates electric car stores for Xiaomi and Xpeng, according to Citi. Among the publicly traded Chinese electric car startups, Citi analysts have buy ratings on Nio and Leapmotor , but not Xpeng or Li Auto, both rated neutral. Citi said in a late November report that Hong Kong-listed Leapmotor is spending more efficiently on research and development than its peers, at around 7,400 yuan ($1,017) per car. In contrast, Xpeng spends 25,900 yuan, Nio spends 26,900 yuan and Li Auto spends 21,000 yuan, according to Citi. The analysts raised their price target on Leapmotor from 44.20 HKD to to 45.10 HKD, nearly 62% above Friday’s close. Citi expects Nio’s U.S.-traded shares can nearly double from current levels to $8.90. In a Dec. 3 meeting with Nio, Citi said the company is aiming to reach breakeven at a group level in 2026 partly by limiting research and development spending increases to less than 10% a year, and increasing car deliveries. The company aims to boost sales of its premium Nio brand by 10% to 20% next year, and accelerate sales of its recently launched lower-priced Onvo brand to 20,000 a month in March, the Citi report said. After two new SUVs launch in the second half of next year, the automaker expects Onvo monthly sales to reach 30,000 to 50,000 vehicles, Citi said.
