China’s EV Titans Shift Gears: BYD Hits 4.6M Sales Amid BMW’s Drastic Price Cuts

Can the established Western premium auto giants survive the price aggression from China’s EV titans? This is the central question facing investors as the latest 2025 sales figures from China’s top New Energy Vehicle (NEV) players paint a picture of relentless growth, juxtaposed with unprecedented competitive maneuvers on the ground.

The headline story belongs to BYD annual sales record, as the Shenzhen behemoth confirmed its position as the world’s volume EV leader, posting a staggering 4,602,436 total vehicle sales for 2025, a 7.73% year-over-year increase. This monumental achievement officially saw BYD overtake Tesla as the global top EV maker for the year.

BYD: The New Global EV Volume Leader

While BYD missed its own ambitious 5.5 million target, falling short by nearly a million units, its sheer scale is undeniable. The mix is key: BYD’s pure electric vehicle (BEV) sales hit 2,256,714 units for the year, surging 27.86% year-over-year, while plug-in hybrids accounted for a substantial portion of the total volume. Furthermore, the company is looking outward, with December exports alone reaching 133,000 units, confirming the overseas expansion narrative we’ve followed closely.

The Startup Surge: Intense Domestic Competition Heats Up

The competition *within* China is perhaps even more compelling for Western observers. While BYD led on volume, several high-growth startups demonstrated explosive growth, signaling a maturing, yet fiercely competitive, market:

• Xiaomi Auto: Achieved a new monthly record, surpassing 50,000 deliveries in December, pushing its annual total over 400,000+.
• XPeng: Delivered a record 429,445 vehicles for the full year, a robust 126% growth, showcasing success in international expansion with overseas deliveries noted.
• Li Auto: Despite a challenging December plunge, the company achieved 1,540,215 historical cumulative deliveries. Full-year deliveries, however, were reported down year-over-year, suggesting pressure on their EREV-focused strategy.
• NIO & Leapmotor: NIO posted strong growth with 326,028 full-year deliveries (up 46.9%), while Leapmotor more than doubled its volume to 597,000 units.

BMW Price War: The Western Reaction

This aggressive volume chase is now directly challenging traditional premium incumbents. News broke that BMW China is reportedly adjusting recommended retail prices on 31 key models starting January 1st, with some price cuts exceeding 300,000 RMB (approx. $42,000 USD). This suggests Western OEMs are feeling the margin squeeze from Chinese entrants like BYD and the ambitious startups.

BMW’s official response framed the cuts as an ‘active response to market dynamics’ and ‘value upgrades,’ while distancing the move from a formal ‘price war’ by stating final terminal prices are set by dealers. For Western investors, this is a critical development: legacy automakers are being forced to reduce pricing power to defend market share against vertically integrated, cost-advantaged Chinese rivals. [See our analysis on European EV Market Outlook 2026 for more context.]

Expert Takeaway for the West

The narrative is no longer about *if* Chinese brands can compete, but *how* quickly they can scale globally and *how* Western brands will respond to shrinking pricing headroom. BYD’s BEV volume growth confirms their core EV tech is competitive, even as they face domestic market cooling and potential trade barriers overseas. The BMW response suggests that European prestige alone may no longer justify a premium when Chinese quality and tech rapidly converge.