06 Jan 2026, 05:45 PM IST i Fierce competition saw BYD Co., China’s EV champion, post its weakest annual sales growth since 2020 last year, as rivals including Geely Automobile Holdings Ltd. and technology giant Xiaomi Corp. begin to gain ground. The nation’s auto firms are also seeing growth slow as they try to expand in tougher markets, such as smaller cities and rural areas. China’s passenger EV sales, including plug-in hybrids and extended-range hybrids, are expected to have reached 15.6 million in 2025, a 27% increase on the previous year, according to a Bloomberg Intelligence forecast. Sales for 2026 are projected to rise just 13%. The country’s auto producers have aggressively tapped export markets as demand at home softens. In the first three quarters of 2025, Chinese companies sold nearly a million EVs overseas, a 54% increase from 2024. Automakers have plans to continue to expand overseas sales in 2026. BYD alone is aiming to export 1.6 million vehicles, according to Citi analysts, while brands like Geely’s Zeekr, Chery Automobile Co. and SAIC Motor Corp. are all targeting offshore markets. Despite European Union tariffs, the bloc remains the top destination for Chinese vehicles, according to BNEF. The EU recently softened its ban on combustion vehicle sales, though, and EV sales are slowing. While EV policy is deteriorating, the sector’s economics are improving. Affordability has been among the largest barriers to EV adoption in the US, and battery prices — the most expensive part of any electric car or truck — fell another 8% in 2025, according to BNEF estimates. “Carmakers that can cut costs and offer affordable models in the most desirable vehicle segments are likely to see sustained sales growth,” BNEF analyst Huiling Zhou said in a recent report. In the US, producers are expected to debut several models in 2026 with sticker prices far below the average price drivers pay for an internal combustion engine car. The sweet spot of the US auto market is the midsize SUV that costs $35,000 or less. American drivers buy somewhere around 2.5 million midsized SUVs every year and 40% of them fall under that price threshold. There will be at least five all-new or substantially overhauled models that will launch in or around that price point in 2026, including the Toyota C-HR BEV, Subaru’s Uncharted, the Kia EV3 and an all-new model from the startup Slate Auto. ALSO READ