China’s electric‑vehicle market, once celebrated as the unstoppable engine of global EV growth, is showing fresh signs of strain. February delivered another reminder that even the sector’s biggest names are no longer immune to intensifying competition, cooling consumer enthusiasm, and growing doubts about long‑term demand.
BYD, the country’s most prominent EV manufacturer and long seen as Tesla’s fiercest challenger, recorded a 41.1% drop in global sales year‑on‑year in February, its sharpest decline since the COVID‑hit month of February 2020. It marked the company’s sixth consecutive monthly fall, signalling a downturn that can’t simply be blamed on seasonal quirks or the extended Lunar New Year holiday.
Even looking at the broader picture, the trend is troubling: BYD’s combined sales for January and February were down 35.8% from a year earlier, the steepest two‑month decline since 2020. Domestic demand appears especially fragile. Sales inside China slumped 65% in February, worsening from January’s already steep 53.2% drop, a slide that allowed rival Geely to briefly overtake BYD as the country’s top automaker.
While BYD continues to expand overseas, shipping more than 100,000 vehicles abroad in February, its home market performance raises deeper questions about China’s once‑unshakeable EV momentum. Increasingly aggressive discounting, price‑war fatigue, and a shrinking technology gap have forced manufacturers to rely on incentive-heavy financing schemes. BYD joined this race in February, rolling out a seven‑year low‑interest plan inspired by Tesla’s earlier move.
And it’s not just the established giants feeling the pressure. Xiaomi, the smartphone and electronics brand that entered the EV market with its SU7 sedan in 2024, also reported a significant sales pullback. The company delivered just over 20,000 vehicles in February, barely half the more than 39,000 it sold in January, according to a post on its official Weibo account. Xiaomi said it is now preparing for mass production of a next‑generation SU7, but early signs suggest enthusiasm around its debut may be cooling faster than expected.
The Chinese government has begun tightening oversight of pricing and export practices to curb destructive competition, but sceptics argue this only underscores the larger issue: the industry may be racing ahead of real consumer demand. For now, China’s EV boom looks less like an unstoppable revolution and more like a market testing the limits of its own hype.
