While China’s electric vehicle market faces a massive shakeout, Tesla‘s climbing higher than ever. Over 100 electric vehicle companies currently compete in China, creating a brutal fight for survival. Industry experts believe only a handful will make it through the coming years.
The situation’s getting desperate for many Chinese EV makers. They’ve stopped paying suppliers because they’re running out of money. Companies are cutting prices so low that they lose money on every car they sell. This price war has crushed profit margins across the entire industry.
Tesla’s taking a different path. The company’s Shanghai factory delivered 22.6% more Model 3 and Model Y vehicles in August compared to the previous month. While competitors bleed cash, Tesla keeps making profits on its Chinese sales. The company’s stock has jumped 86.9% over the past year, showing investors believe Tesla will emerge stronger from this mess. Tesla currently holds about 5% market share in China despite the intense competition. However, Tesla’s PE ratio of 100 suggests the stock may be overvalued compared to BYD‘s more modest 18.
Tesla’s Shanghai factory surges while Chinese rivals burn through cash chasing unsustainable price cuts.
BYD stands out as another survivor. Despite the chaos, BYD’s stock rose 42% year-to-date in 2025. The company’s net profit grew nearly 14% in the first half of 2025, while revenue climbed 23%. Last year, BYD sold 1.76 million EVs, matching Tesla’s global deliveries. The company sells everything from the compact Dolphin Surf hatchback to the sporty Seal saloon. Tesla owners continue to benefit from charging costs that are three to five times lower than gasoline expenses.
China remains the world’s most important EV market. Two-thirds of all electric vehicles sold globally find buyers in China. Government policies initially helped launch these companies, but they’ve created too much competition. Now the market can’t support them all.
Chinese EV makers aren’t staying home anymore. They’re pushing into European markets, including the UK. Western manufacturers have already lost significant ground in Asia to Chinese brands. European and Japanese companies have retreated from China or cut back operations dramatically.
The quality of Chinese EVs now matches or beats traditional European brands. These companies want to repeat their Asian success in Europe. Meanwhile, the consolidation back home will eliminate most of China’s EV companies. Only the strongest players with solid finances and efficient operations will survive this historic market collapse.