China hosts the world’s largest electric vehicle market, yet size has brought instability. Monthly sales now swing sharply, leaders stumble then rebound, and exports surge even as domestic demand turns uneven. Recent data from late 2025 underlines how volatility has become a defining feature of China’s EV landscape, shaping strategies for local champions and foreign brands alike.
Why does the biggest EV market feel so unstable?
At headline level, China’s new energy vehicle penetration looks unstoppable. In November 2025, NEVs accounted for more than half of all new car wholesales, a threshold crossed for the first time only a month earlier. Wholesale NEV volumes reached 1.82 million units, up more than 20 percent year on year. Battery electric vehicles alone exceeded 1.17 million units for a third straight month.
Yet beneath these structural gains sits extreme short term turbulence. Individual manufacturers face violent month on month swings, while year on year comparisons flip from growth to contraction within weeks. Scale magnifies these movements. When a market sells nearly two million EVs a month, even modest percentage shifts translate into tens of thousands of vehicles gained or lost.
How are domestic leaders riding the swings?
BYD remains the clearest example of resilience amid turbulence. In November, the company sold more than 306,000 passenger NEVs, retaining around 23 percent market share. That kept it firmly in first place, despite a year on year decline of more than 26 percent. The drop reflected a tough comparison base and intensifying competition rather than any loss of strategic position.
Geely followed with roughly 172,000 units and a 13 percent share, underlining how Chinese manufacturers continue to dominate at scale. Together, domestic brands still account for the majority of EVs sold on Chinese roads. However, even market leaders now see large volume swings as price competition intensifies and product cycles shorten.
This volatility pressures margins. Frequent discounting, rapid model refreshes, and overlapping segments mean dominance no longer guarantees stability. Market share can rise even as absolute volumes fall, highlighting how relative positioning matters as much as raw growth.
What explains Tesla’s sharp reversals?
Tesla’s China performance in late 2025 illustrates the market’s whiplash dynamics. In November, Tesla’s retail sales jumped to more than 73,000 units, an increase of 181 percent from October. The rebound pushed Tesla back into the top five by market share.
However, the surge masked ongoing fragility. Retail volumes were still marginally lower than a year earlier, marking the fifth consecutive month of year on year decline. Wholesale shipments told a different story, rising to nearly 87,000 units, up almost 10 percent year on year. That gap points to delivery timing, inventory flows, and export allocation rather than a clean demand recovery.
For Tesla, China remains critical but unpredictable. Year to date retail sales through November fell more than 7 percent compared with 2024, a year that had delivered record volumes. Sudden rebounds now coexist with broader downward trends, reinforcing how foreign brands face sharper exposure to China’s demand cycles.
Is export growth masking domestic instability?
Exports have become a crucial release valve. In November, China exported a record 300,000 NEVs, up 260 percent year on year. Battery electric exports reached 177,000 units, while plug in hybrids added another 124,000. Overall vehicle exports climbed nearly 50 percent.
These flows helped absorb production capacity as domestic demand softened in pockets. Even excluding exports, domestic NEV wholesales still rose to more than 1.5 million units. Yet the scale of export growth raises questions about durability. Chinese industry bodies have already warned that export expansion could slow in 2026 as overseas markets tighten policy or impose trade barriers.
Global data adds caution. Reuters reported that worldwide EV sales growth slowed to its weakest pace since early 2024 in November, with policy shifts in the United States and plateauing momentum in China weighing on totals. Europe continued to grow, yet unevenly. That divergence suggests exports cannot fully offset domestic volatility forever.
What does this mean for China’s EV trajectory?
China’s EV transition remains structurally strong. Penetration continues to rise, manufacturing depth is unmatched, and innovation cycles are fast. However, the market has entered a phase where maturity brings instability rather than calm. Intense competition, thin margins, and constant pricing pressure create sharp oscillations in monthly results.
For automakers, strategy now hinges on resilience. Scale alone no longer insulates firms from shocks. Flexible production, diversified export channels, and disciplined pricing matter more than headline growth. For policymakers, volatility complicates efforts to manage capacity and avoid destructive price wars.
Globally, China’s turbulence matters because of its sheer weight. Swings in Chinese output ripple through battery supply chains, raw material demand, and export markets worldwide. The largest EV market on earth is no longer just a growth engine. It is also a source of uncertainty.
The lesson from late 2025 is clear. China’s EV story remains dominant, yet it has become less predictable. Extreme scale amplifies every shift, turning routine market movements into global signals. Volatility is the new normal.
