Chinese EV Makers Pivot to Global Markets as Domestic Demand Cools
China's electric vehicle market, once a growth juggernaut, shows signs of fatigue. Slowing domestic sales have forced automakers like BYD, Geely, and Leapmotor to accelerate overseas expansion into Europe, Southeast Asia, and Latin America. The shift comes as analysts warn of margin compression from 2026 tax cuts and weakening premium EV demand.
Investor sentiment has turned brittle. Xpeng shares plunged 10% in Hong Kong after disappointing earnings, while Li Auto and Nio's fourth-quarter forecasts fell short of expectations. The sector's slowdown reflects broader challenges: NEV growth projections for 2026 have been revised down to 13%, less than half the previous year's pace.
Some manufacturers are diversifying into robotics and adjacent technologies as competition intensifies. But the primary lifeline remains exports – a strategy now complicated by rising trade barriers and localized production requirements in target markets.
