The competitive landscape for automakers shifted in January, with Xiaomi emerging as the "new champion" while BYD faced domestic challenges.
On February 1, BYD Company Limited released its production and sales report, announcing January sales of 210,100 vehicles, representing a year-on-year decrease of 30.11% and a month-on-month plunge of 50.04%.
The halving of the purchase tax for new energy vehicles (NEVs) in China to 5%, effective January 1, is likely a key factor impacting BYD's January sales performance.
Previously, to promote the development of the NEV sector, China had implemented a full exemption from the purchase tax, a policy that significantly aided the rapid growth of BYD and other NEV manufacturers.
In contrast, several other NEV makers reported positive results for January. For instance, Xiaomi Auto reported deliveries exceeding 39,000 vehicles, surpassing Leapmotor to become the monthly sales champion among new automakers for the first time.
Meanwhile, automakers focusing on the mid-to-high-end NEV market, such as Seres, Nio, and Voyah Auto, saw their January deliveries (sales) increase year-on-year by 104.85%, 96.08%, and 31.29% respectively.
Industry leaders had previously predicted that once this point was reached, gasoline-powered and new energy vehicles would, to some extent, face a final showdown, ultimately revealing which NEV manufacturers are positioned for sustainable growth.
BYD's domestic sales are undergoing a significant test, while some other indigenous brands are pursuing a dual-track strategy.
Data shows that BYD's overseas sales in January 2026 reached 100,500 vehicles, a year-on-year increase of 51.47%, though down 24.55% month-on-month.
The overall sales decline for BYD in January 2026 is primarily attributed to weak performance in its domestic market.
The production and sales report indicates that BYD's domestic sales in January 2026 were 109,600 vehicles, plummeting 53.22% year-on-year and 61.85% month-on-month.
BYD's domestic sales have shown a continuous downward trend, with year-on-year declines of 24.11%, 26.81%, and 37.24% in October, November, and December 2025, respectively.
Unlike some other indigenous brands, BYD officially announced the cessation of gasoline vehicle production in 2022 to fully commit to new energy vehicles.
Now, facing the halved NEV purchase tax domestically, BYD lacks gasoline vehicles to hedge against the associated risks.
Some indigenous automakers, however, maintain a "walking on two legs" approach, continuing development along both NEV and gasoline vehicle lines.
Taking Geely Auto as an example, its January 2026 sales of new energy vehicles and gasoline vehicles were 124,300 and 145,900 units respectively, both achieving year-on-year growth, making it one of the few automakers to see increases in both segments.
Gui Shengyue, Geely Auto's CEO and Executive Director, previously stated that the company benefits from multiple favorable factors in the first quarter of 2026, including its competitive advantage in the gasoline vehicle segment and the positive impact on the gasoline car market from the reduction in NEV subsidies.
Gui indicated that starting from the second half of 2025, Geely Auto has seen a concentrated launch of new models with ample orders; vehicles like the Zeekr 9X, Lynk & Co 09, and Galaxy M9 are in high demand, providing strong support for deliveries in Q4 2025 and Q1 2026.
Production and sales data show that Zeekr, Geely's premium intelligent electric vehicle brand, saw January 2026 sales surge 100% year-on-year to 23,900 units. Industry sources suggest the Zeekr 9X, launched in September 2025, experienced a breakout in 2026, with sales exceeding 10,000 units.
Xiaomi has become the "new king," as the title of sales champion among new automakers has changed hands frequently.
In recent years, predicting the January sales champion among new automakers has been difficult. The champions for January 2025 and January 2026 were XPeng and Xiaomi Auto respectively, both surprising market observers.
For the full years of 2024 and 2025, Li Auto and Leapmotor were the annual sales champions among new automakers, with Leapmotor holding the top spot for ten consecutive months from March to December 2025.
Now, Xiaomi Auto is not only the January 2026 champion but has also opened a significant gap over the second-place contender, Leapmotor.
In January 2026, deliveries for Xiaomi Auto and Leapmotor were over 39,000 and 32,100 vehicles respectively, with the gap estimated to exceed 6,800 units.
In January 2025, XPeng and Li Auto were the top two new automakers, with deliveries of 30,400 and 29,900 vehicles respectively—a difference of only 427 units.
Xiaomi Auto has further moves planned. Lei Jun, Founder, Chairman, and CEO of Xiaomi, stated on Weibo: "An updated SU7 is coming soon; currently, the main deliveries are for the YU7."
Recently, Xiaomi Auto announced that the new-generation SU7 is expected to launch in April 2026.
Currently, Xiaomi Auto offers two models: the sedan SU7 and the SUV YU7, though specific sales figures for each model in January 2026 have not been disclosed.
Data from third-party platform Dongchedi shows that in December 2025, sales of the YU7 and SU7 were 39,100 and 11,100 units respectively, indicating the YU7 is currently Xiaomi's primary volume driver.
Xiaomi Auto is poised to become a formidable competitor for Leapmotor, which faces significantly increased sales pressure in 2026.
As the 2025 full-year champion, Leapmotor has set a 2026 sales target of 1 million vehicles, while Xiaomi Auto's delivery target for 2026 is 550,000 units.
Zhu Jiangming, Founder, Chairman, and CEO of Leapmotor, stated that the company will go all out in Q1 2026, launching the A10, the first model in its A-series, to offer a premium experience at a price below 100,000 yuan.
Reportedly, Leapmotor plans to introduce features like lidar and high-level assisted driving into the entry-level market with the A10, positioning it as a key driver for achieving its ambitious 1 million unit sales target for 2026.
Automakers have ignited a "7-year low-interest" war, with Lei Jun personally responding.
While releasing January 2026 sales figures, several automakers also introduced new financial purchase schemes for February 2026.
For example, on February 1, 2026, Nio launched "7-year ultra-low interest" financing plans for its Nio brand models (new ET5, ET5T, ES6, EC6), its Ledao brand models (L60, L90), and its Firefly brand.
On the same day, Lei Jun announced a new Xiaomi Auto "7-year low interest" scheme via Weibo, starting with a down payment of 99,900 yuan and monthly payments as low as 1,931 yuan.
When a user asked, "Can those who locked orders in January but haven't taken delivery benefit?" Lei Jun replied, "Yes!"
According to incomplete statistics, Tesla initiated the "7-year ultra-low interest" trend in January 2026, followed by similar schemes from Xiaomi Auto, Li Auto, XPeng, Geely Auto, and others, with some offers featuring zero down payment.
In February 2025, Nio, XPeng, Tesla, and others also launched financial schemes, but these primarily involved "5-year zero interest" and insurance subsidies.
Cui Dongshu, Secretary-General of the China Passenger Car Association, recently noted that, driven by policy, new automakers are generally avoiding direct price cuts, instead opting for ultra-long-term, low-interest financing plans.
A recent notice jointly issued by the Ministry of Finance, the People's Bank of China, and the National Financial Regulatory Administration outlined an extension of the fiscal subsidy policy for individual consumer loans until the end of 2026.
The notice specifies that consumer finance companies and auto finance companies with a regulatory rating of 3A and above are included as implementing agencies for local subsidy policies, expanding coverage. The annual subsidy ratio for loans is 1 percentage point, with higher subsidies for longer loan terms. The central and provincial governments will bear 90% and 10% of the subsidy funds, respectively.
In Cui Dongshu's view, the proliferation of ultra-long-term, low-interest auto financing schemes essentially represents a disguised form of price competition, with the core logic being to offset the impact of reduced subsidies, alleviate consumer purchase pressure, and stimulate sales growth.
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