New electric vehicles destined for Belgium at a port in Taicang city in eastern China’s Jiangsu province on Jan. 11, 2025.Future Publishing | Future Publishing | Getty ImagesBEIJING — China’s electric car market is headed for a sharp slowdown in 2025, according to analyst predictions, increasing pressure on companies trying to survive.Sales of new energy vehicles, a category which includes battery-only and hybrid-powered cars, surged last year by 42% to nearly 11 million units, according to the China Passenger Car Association. Market leader BYD’s NEV sales skyrocketed — up by more than 40% last year to nearly 4.3 million units, far above its internal target of at least 20% growth from 2023.But looking ahead, HSBC analysts forecast only a 20% increase in China’s new energy vehicle sales this year, alongside heightened industry consolidation. They predict BYD unit sales growth of around 14%.Strong sales volumes have enabled “strugglers and stragglers” to hang on despite falling margins, Yuqian Ding, head of China autos research at HSBC, said in a report last week. She pointed out that only BYD, Tesla and Li Auto made a profit in 2023.”In our view, this situation is unsustainable and we expect the pace of industry consolidation to accelerate rapidly,” Ding said.China’s mix of subsidies and consumer purchase incentives have supported the rapid growth of new energy vehicles in recent years.Shenzhen-based laser display company Appotronics didn’t even have an autos business until it started making an in-car projector screen that began deliveries in China early last year. The company shipped more than 170,000 units last year.But in a sign of a changing market, the company only expects similar volumes in 2025, Appotronics Chairman and CEO Li Yi told CNBC last week. He predicted the market wouldn’t pick back up until 2026.”A lot of customers, the automakers, they’re not in a good financial state. They cut the R&D budget. That will definitely have a negative impact on this industry,” Li said, also noting overcapacity issues.As automakers piled into China’s fast-growing electric car market, they b …
