VW, Toyota, and Hyundai bet on Chinese tech partners as domestic brands control 70% of the market

"In January and February 2026, Volkswagen reclaimed the top position in China's passenger vehicle market with a 13.9 per cent share, narrowly ahead of Geely at 13.8 per cent. Toyota's joint ventures held 7.8 per cent. BYD, which dominated 2024 and much of 2025 as the world's largest EV maker, slipped to fourth at 7.1 per cent after six consecutive months of declining sales, its steepest drop since the pandemic."

"China ended its purchase tax exemptions and trade-in incentives for new energy vehicles at the close of 2025. The expiration hit domestic EV and plug-in hybrid makers hardest because their sales volumes had been inflated by subsidies that made their cheapest models artificially competitive."

"Foreign automakers have lost roughly a third of the Chinese market in five years. Domestic brands now control nearly 70 per cent of passenger vehicle sales, up from less than 40 per cent in 2020."

In early 2026, foreign automakers briefly regained market share in China after the expiration of EV subsidies, with Volkswagen leading at 13.9%. However, domestic brands still control nearly 70% of the market. BYD, previously the largest EV maker, saw significant sales declines, dropping to fourth place. The end of purchase tax exemptions and trade-in incentives impacted domestic EV makers the most, revealing that the foreign comeback was temporary and largely due to subsidy effects rather than improved competitiveness.

Read at TNW | Cars