While the historic antagonism between China and the U.S. appears to be morphing into a sort of “co-opetition” complete with photo ops (1), potential trade agreements (2) and some progress towards recognizing shared goals (3), the two superpowers are still eternally trying to one-up each other when it comes to AI, manufacturing (4), earth observation (5), intel and more — including, recently, auto manufacturing.
Developments on China’s tech (6) and automation (7)fronts have had international carmakers shaking in their boots this year, particularly when it comes to electric vehicles.
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“We have no chance against this,” Honda CEO Toshihiro Mibe ominously conceded in April after witnessing the staggering efficiency of one Shanghai parts factory. Toyota and Ford executives echoed the realization that players in China’s sector are lightyears ahead, in part due to fierce competition amongst themselves that necessitates excellence.
But even with all of the advantages that firms like Shenzhen-based BYD have — cheap labour, lax regulations, a more comprehensive supply chain, a wealth of rebates to take advantage of and more (8) — it seems that not even speed, quality and rock-bottom pricing can ensure staying power.
Some Chinese automakers have faltering sales
As recently reported by The Economist (9), BYD’s sales have been down for eight consecutive months compared to the same time a year prior. And, despite a 10x surge in revenue between 2015 and 2025, last year marked a substantial year-over-year decline in the company’s profits, the first drop since 2021.
This could be because of the fact that, as a battery company first and foremost, China’s (and the world’s (10)) largest EV brand seems to be falling behind domestically in the areas outside of hardware.
Drivers have touted BYD’s Chinese rivals like Nio (11), Xiaomi (12) and Li Auto (13) for their focus on the driving experience, with features ranging from built-in AI assistants, autonomous driving and family-friendly interiors to easy integration with other devices and unique owner benefits that extend off the road (think access to exclusive events and businesses). International peers like Volkswagen are collaborating with tech names rather than creating products in-house that are outside of their expertise.
Source: Yahoo Finance