If 2024 is the year when traditional foreign automakers withdraw from the Chinese auto market, then 2025 seems to be the year when a few local electric vehicle companies consolidate their leadership position. Nomura Securities said in its 2025 Global Auto Outlook released on December 4: “In China, (new energy vehicle) leaders such as BYD are likely to further consolidate their market positions, while foreign brands will gradually decline.” They pointed out that, BYD has held a leading position in the global automobile market for 16 years. The Hong Kong-listed automaker is Nomura’s top choice for the Chinese auto market. Analysts have given BYD a buy rating and a target price of HK$375 ($48.20), which is slightly more than 3% higher than last Friday’s closing price. BYD’s third-quarter revenue surpassed Tesla’s for the first time. By 2023, the Chinese automaker will produce more cars than Elon Musk’s automaker for the second year in a row. Tesla still makes more battery-only cars than BYD, whose hybrids account for at least half of sales. But the U.S. electric car company’s prices are much higher than most of BYD’s models. According to CNBC’s calculation of data from the China Passenger Car Association, Tesla’s sales in China fell by 4.3% year-on-year in November, while BYD’s sales increased by 67%. Nomura Securities said BYD is well ahead of its rivals, while Geely Automobile, China’s second-largest market share, has only 8%. Analysts at HSBC raised their price target for Hong Kong-listed Geely Automobile to HK$19.30 at the end of November, nearly 31% higher than the stock’s closing price on Friday. The firm rates the stock a buy. Analysts at HSBC said: “We believe that supported by the strong performance of newly launched models, the company is expected to exceed the full-year target of 2 million units, and the electric vehicle penetration rate may reach 40%.” They expect Geely’s sales next year to be Growth of 22% to 2.6 million vehicles. Geely owns U.S.-listed electric vehicle company Zeekr and other car brands, including Swedish brand Volvo, which the Chinese company acquired from Ford in 2010. . General Motors announced last week it expected to incur billions of dollars in costs as it restructures its joint venture with SAIC Motor in China. The changes include plans to close factories. Nomura Securities said SAIC-GM-Wuling, a local GM joint venture, had a 3% share of the Chinese auto market as of October. Data shows that the company holds 6% of the shares in the new energy vehicle field. Compared with top EV makers BYD and Geely, Chinese EV startups account for only a small part of the domestic market. One of the companies Citi analysts have given a buy rating is Hong Kong-listed Yongda, which operates stores in China for several new energy vehicle brands, including Huawei’s Alto. While the Chinese smartphone and telecommunications giant stresses that it does not make cars, Huawei has partnered with traditional automakers to sell battery-only and hybrid vehicles that include in-car entertainment systems, driver-assistance technology and other software. Citi analysts said that based on conversations with Yongda management on December 4, sales of cars running Huawei’s automotive systems could reach 1 million units next year, higher than internal forecasts of 700,000 units. According to Citibank, Yongda expects the total number of Huawei authorized stores to exceed 20 early next year, compared with the current eight. The company set the target price of Yongda at HK$2.98, an increase of nearly 47% from last Friday’s closing price. Yongda also operates electric vehicle stores for Xiaomi and Xpeng Motors, according to Citi. Among China’s listed electric vehicle startups, Citi analysts have buy ratings on NIO and Zero Sports Car, but not buy ratings on Xpeng Motors and Li Auto, both of which have neutral ratings. Citi said in a report in late November that Hong Kong-listed Zero Roadster has spent more efficiently on research and development than its peers, spending about 7,400 yuan ($1,017) per vehicle. Citi said that in comparison, Xpeng Motors costs 25,900 yuan, NIO costs 26,900 yuan, and Li Auto costs 21,000 yuan. Analysts raised Leapmotor’s target price from HK$44.20 to HK$45.10, an increase of nearly 62% from last Friday’s closing price. Citigroup expects NIO’s U.S.-traded share price to nearly double from current levels to $8.90. Citi said at a meeting with NIO on December 3 that the company aims to achieve breakeven at the group level in 2026, in part by limiting R&D spending growth to less than 10% annually and increasing vehicle deliveries. Citi reported that the company aims to increase sales of its high-end Nio brand by 10% to 20% next year and accelerate sales of the recently launched low-price Onvo brand to 20,000 units per month in March. Citi said the automaker expects Onvo sales to reach 30,000 to 50,000 units per month after launching two new SUVs in the second half of next year.
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