China's new energy vehicles

Inward winding is a dead end, but going to sea is the way to survive

In-depth observation of the 2026 Wuhan Forum·Profit margin of 3.2% vs export growth rate of 140%

Profit margins fell to 3.2% in the first quarter. Hundreds of new cars smashed into the market, but retail sales fell by nearly 20%. But at the same time, new energy exports grew by 140%. In the same industry, two completely different faces.

At the Chongqing Forum last month, Wang Xia, president of the Automobile Industry Branch of the China Council for the Promotion of International Trade, took the stage and released a set of data. The audience was silent for a few seconds.

In the first five months of 2026, hundreds of new cars poured into the market, and the national retail sales of passenger cars dropped by nearly 20% year-on-year. The profit margin of the automobile industry in the first quarter was 3.2%, which not only reached a new low, but was also far lower than the national average of 4.9%.

This is not the most ruthless. The full-year profit margin in 2025 will fall from 4.3% to 4.1%, leaving only 1.8% in December. Selling a car may not make more money than selling a mobile phone.

"The marginal effect of price wars is accelerating."-- wangxia

Consumers are numb to price cuts. You drop 20,000 yuan, he drops 30,000 yuan, and the market does not move. This is not a price war, this is mutual harm. But there is another side to the story.

1. How miserable is the internal volume: price cuts, losses, and endless cycles

Put a few numbers first and feel what it means to "roll into the bones":

·In 2024, more than 220 models will be reduced in price

·In the first four months of 2025, more than 60 more follow-up actions

·Hundreds of new cars rushed in, but retail sales fell by nearly 20% year-on-year

After lowering the price so much, what did you get?

"You don't know how to compete, you'll be tough as soon as you start, and you'll just draw the knife."-- Chen Jian, former Vice Minister of Commerce

The cost side is even more outrageous. Zhang Xinghai, chairman of Celis, made some calculations: the average cost of bicycles in the world has increased by 15,000 to 20,000 yuan. Lithium carbonate has soared from less than 60,000/ton in mid-2025 to 180,000/ton, and memory chips have increased fivefold.

Price reduction → Unprofitable → Cutting R & D budgets → Products are becoming more and more mediocre → We can only continue to reduce prices. This endless cycle cannot come out if you put it in.

"Rolling prices is a dead end."-- Wang Hui, Chairman of Avita

"Mid-to-high-end brands will no longer maliciously fight price wars, and no one can kill anyone."-- Ideal Car CEO Li Xiang

After bargaining with each other for three years, no one hacked to death, but chopped themselves to pieces. The regulatory authorities couldn't sit still. The "Guidelines for Compliance of Price Behavior in the Automobile Industry" was issued at the end of 2025. In March this year, the three ministries and commissions jointly held a symposium. On June 11, the Ministry of Industry and Information Technology and the State Administration for Market Regulation directly interviewed car companies suspected of irrational competition.

The matter of internal censorship has been officially characterized as "irrational."

2. How fierce is it to go to sea: one month kills the amount of the past year

At the same time, if you change the perspective, the picture will be completely different.

In March 2026, China's monthly automobile exports were close to 700,000 units, a year-on-year increase of more than 70%. The growth rate of new energy vehicle exports is close to 140%, accounting for more than half for the first time.

In 2021, China's annual automobile exports will just exceed 2 million units. Now it reaches 700,000 vehicles a month. The three-month volume is the largest in the past year.

The comparison of profits is even more dazzling. Selling a car in China earns hundreds of yuan or even sells it overseas--

A domestic compact SUV worth 120,000 can sell for 180,000 to 200,000 in Russia and Central Asia. A domestic tram worth 100,000 yuan can sell for more than 150,000 yuan in Brazil.

If you change the market for the same car, your profits will double. This is not a theory, it is something that happens every day.

Yutong Bus was one of the first batch to understand it. Domestic high-speed railways are being built more and more densely, making road passenger transport overwhelmed. Yutong didn't fight hard at home and turned around and went overseas. In a few years, we have achieved "recreating a Yutong overseas"-the income and profits contributed overseas have exceeded those of China.

The overseas growth rates of BYD, Geely and Chery range from 100% to several hundred %. 1-5 In January, Chery exported a total of 749,000 vehicles and BYD 617,000 vehicles. Geely's growth rate surged to 150%.

3. Why can going to sea break the situation?

First, the country has peaked and the increase is overseas

Domestic passenger car retail sales have declined for eight consecutive months, with a cumulative decline of 19.5% from January to May. This is not an accidental fluctuation, but a structural peak-the number of cars per 1,000 people has reached 230, and the growth rate will inevitably slow down.

But there are still a bunch of markets around the world on the eve of the explosion. In Russia and the five Central Asian countries, fuel vehicles are old, expensive parts and difficult to maintain. Brazil's new energy subsidies have increased, and the market has doubled in a year. Although Southeast Asia is crowded a little, the total volume is still expanding rapidly.

Domestic market is a game of stock. If you take more, I will take less. Overseas is an incremental market, and it is a competition for who runs faster.

Second, the end of the price war is the technology war, and the home field of the technology war is overseas

Why is it so fierce in China? Because the products are so similar. They are all equipped with 500-kilometer battery life, L2-assisted driving, and large-screen vehicles. Consumers can only compete with anyone cheaper.

But overseas, the advantages of China's new energy vehicles are overwhelming. Battery motor electronic control leads the world. Smart driving systems are fed by China's complex traffic environment and huge user base. Going overseas is a blow to dimension reduction. There is also cost control hard-earned from the domestic price war-these three things add up to basically no opponent on a global scale.

The Russian and Central Asian markets are particularly typical. Local consumers will understand as soon as they calculate the score: a 100,000-yuan affordable electric vehicle in China costs only one-tenth of that of a fuel-fired vehicle. Change or not? Of course.

Third, from "selling cars" to "building ecology", the real moat is overseas

In the early years, going to sea was to sell the whole car and sell it and leave. The mainstream style of play in 2026 has completely changed_

Car + charging pile + battery parts + after-sales operation and maintenance, go out one set.

Leading car companies have set up KD assembly plants overseas to reduce costs and avoid tariffs through localized production. China-Europe freight trains have become a major artery, and the technical problem of land transportation of lithium batteries has been overcome. This is not a simple product export, but a progressive process from product export → technology output → standard output → industrial co-construction. Once the ecology is built, it will be difficult for others to cross the moat.

4. Three emerging trends

Trend 1: Russia + Central Asia can do it

European and American markets have high tariffs and strict certification, and Southeast Asia is crowded. What about Russia and the five Central Asian countries? Low trade barriers, strong demand for electrification, and convenient logistics. Affordable tram below 100,000 is needed

Trend 2: Used cars going out to sea, a new growth point

Second-hand electric vehicles with low age and high endurance that have been eliminated in compliance with domestic regulations, coupled with the relaxation of local import policies, are becoming a new growth point in 2026. A second-hand tram that is 3 to 5 years old can sell for 50,000 yuan in China and 100,000 yuan in Africa.

Trend 3: Moving from price war to value war, the two paths reach the same goal

"Shut down and transfer redundant entities to concentrate resources to make an advantageous platform."-- Geely Group Li Shufu

This year, more than 10 car companies and 15 brands have begun to adjust prices or tighten discounts, and bicycles have increased by as much as 20,000 yuan. The logic of domestic competition is changing from "who is cheaper" to "who is better." From the beginning, overseas markets have been striving for product strength, service, and ecology.

The two roads come to the end, but they are actually the same: only by going out to sea can we truly complete the turn from price war to value war.

5. A few last words

"The industry has entered the most brutal stage of the knockout rounds."-- NIO founder Li Bin

At home, this is a crisis. With overcapacity, demand peaking, and profits returning to zero, there will only be more and more losers.

But globally, this is an opportunity. With the advantages of China's new energy vehicles in industrial chain, intelligence, and cost control, there is basically no equivalent to them on a global scale.

At the end of the scroll, everyone loses money together. The end of going out to sea is to find those unmet needs and make money back.

This is true for car companies. The same is true for everyone in the industry chain. The window period may be two to three years. If you don't go out now, you may not even be qualified to go out in the future.

Data source: Public reports from China Automobile Manufacturers Association, Passenger Transport Association, China Automobile Dealers Association, and 2026 China Automobile Chongqing Forum.

Source: Xiong Yu, digital automobile export

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