OEM Dynamics | OEM Trend

• Kuai Technology reported on May 28 that Denza has delivered over 10,000 units of its all-new Z9GT in just two and a half months. Launched on March 5, the lineup offers five configurations priced between 269,800 and 369,800 yuan — a significant price cut from the previous generation, paired with comprehensive technological upgrades.

• Sina Finance: XPENG Chairman He Xiaopeng revealed in a recent interview that the company has executed a major strategic pivot in autonomous driving. Concluding that a "patchwork" approach merging software engineering with AI algorithms cannot deliver true driverless capability, He scrapped the old system last year — despite billions in investment — to bet on a new "Physical AI" architecture. He believes this path positions XPENG to achieve Level 4 autonomy within 18 to 24 months, roughly by the end of 2027. He emphasized that autonomous driving is just one application of Physical AI; the company is building its next decade around three growth curves: vehicles, robotics, and global operations.

• Cailian Press: Data released by Toyota on May 28 shows global sales slipped 3.1% year-on-year in April to 849,300 units, marking the third straight monthly decline. Conversely, global output rose 2.0% to 832,000 vehicles — a second consecutive increase and a record high for the month. Exports from Japan to the Middle East plummeted 91.7% to just 2,418 units. This marks the second month of declining exports to the region, with the drop accelerating from March's 46.4% slump.

• IT Home: Chery Automobile and Japanese auto accessories giant AUTOBACS SEVEN announced plans to launch light electric vehicles in Japan. The partners established a new EV brand called "EMTA." He Xiaoqing, CEO of EMT, the entity developing and selling the brand, emphasized at a briefing that this is a brand built specifically for Japanese consumers.

• Gasgoo: NIO CEO William Li recently told attendees at the "NIO ES9 Media Roundtable" that rising costs for raw materials like nickel, cobalt, and lithium carbonate have added over 10,000 yuan to the price of a single vehicle this year. Li noted that since commodities and memory chips also affect faster-growing, wealthier sectors, automakers lack bargaining power. Memory prices haven't retreated since their surge, and raw material costs are unlikely to ease anytime soon — meaning manufacturers have to absorb these pressures themselves.

• Cailian Press: Data from Tianyancha shows Anhui Xidian Energy Technology Co., Ltd. was recently established, with Li Zhongbing as legal representative and a registered capital of 500 million yuan. Its business scope covers battery manufacturing, sales, and energy storage technology services. The entity is wholly owned by Chery Automobile Co., Ltd.

Supply Chain News | Supply Chain News

• Gasgoo: On May 28, semiconductor manufacturer ROHM unveiled the "AG16xFNxx series," an 80V MOSFET designed for the increasingly common 48V automotive power systems. The new components utilize HPLF5060 and DFN3333 packages, offering significant miniaturization compared to the standard TO-252 packaging typically found in automotive MOSFETs.

• Gasgoo: China Taiwan Province's solid-state battery maker ProLogium Technology announced on May 28 that it will go public in New York via a merger with SPAC Translational Development Acquisition Corp. (TDAC). The deal values the company at $3.8 billion.

• Gasgoo: CATL recently disclosed plans to issue 5 billion yuan in green technology innovation bonds, its third tranche for 2026. The notes carry a "3+2" year maturity, with proceeds earmarked for lithium-ion battery production operations and supply chain payments. This issuance falls under the company's 40 billion yuan registered quota for green bonds.

• Gasgoo: RoboSense released its first-quarter earnings report, showing revenue climbed roughly 40% year-on-year to 460 million yuan. Total LiDAR shipments surged 204.1% to 330,300 units. Even more striking, sales in the robotics sector skyrocketed 1,458.8% to 185,500 units. That segment's share of total volume jumped from 11% a year ago to 56%, overtaking automotive ADAS business for the first time to become the company's largest revenue driver.

Industrial Economy | Industrial Economy

• Gasgoo: Data released by the Society of Motor Manufacturers and Traders (SMMT) on May 28 shows UK car and commercial vehicle production fell 1.2% year-on-year in April. The decline was driven by lower commercial vehicle output and sluggish exports to China.

• Cailian Press: The China Passenger Car Association (CPCA) reported that retail passenger vehicle sales reached 989,000 units from May 1 to 24 — a 24% drop from the same period last year, though up 10% from April. Year-to-date retail sales totaled 6.594 million units, down 19%. In the new energy sector, retail sales came in at 619,000 units for the same period, an 11% annual decline but a 13% monthly increase. Year-to-date NEV retail sales hit 3.377 million units, down 16%. The NEV retail penetration rate for the period stood at 62.5%, while the wholesale penetration rate reached 63.6%.

• Gasgoo: A joint report by the China Automobile Dealers Association and Jingzhengu on April residual values shows online used-car supply recovered steadily last month, with resale values rising across multiple segments. Yet, beneath the surface, tensions are rising: joint-venture brands are seeing a widening split, luxury values have stabilized, and the used EV market is finally hitting a turning point in acceptance after early concerns over depreciation.

Policy Updates | Policy Situation

• Cailian Press: Work on the "Roadmap for the Application and Promotion of Renewable Materials in Vehicles (2026–2030)" officially kicked off in Beijing, led by the China Automotive Strategy and Policy Research Center and the China Association of Circular Economy. The roadmap will outline targets, implementation paths, and support measures for the next five years, focusing on using recycled materials in frames, bodies, wheels, glass, and trim to drive a greener, circular auto industry. Experts note that recycled plastics and aluminum are already finding their way into interiors, structural components, and functional parts. As technology improves, further breakthroughs are expected. Given the industry's strict demands for performance and safety, the roadmap will also prioritize research into material standards, quality certification, application validation, and supply chain coordination.

Personnel Changes | Change of personal

• Gasgoo: Volkswagen (Anhui) Digital Sales Service Co., Ltd. announced on May 28 that current COO Liu Zhanshu will become Chief Executive Officer effective July 1, 2026. The company stated the appointment is part of its long-term talent pipeline strategy, aimed at reinforcing organizational stability and driving sustainable business growth.

Gasgoo Munich- Zhuoyu Technology officially opened its European headquarters on May 27. At the opening ceremony, CEO Shen Shaojie outlined several key business developments.

On the technology front, Zhuoyu marked the occasion by unveiling its latest core paradigm to the European market: the native multimodal foundation model. Intelligent driving systems equipped with this architecture are expected to demonstrate superior generalization capabilities across diverse scenarios and verticals.

Currently, the general capabilities of Zhuoyu's mobile intelligent base extend beyond passenger cars. The platform is set to empower sectors ranging from commercial heavy trucks and buses to unmanned logistics and embodied intelligence, with physical field testing in Europe launching soon.

Image Source: Zhuoyu Technology

In terms of commercialization, Zhuoyu announced it is partnering with Volkswagen Group in Europe on a proof of concept (POC) for next-generation intelligent driving. The pilot vehicle will be the ID. Buzz, a flagship model of Volkswagen's all-electric platform. Notably, this marks the first Volkswagen commercial vehicle carrying a Chinese intelligent driving solution to undergo verification testing on real European roads.

To bolster its European operations, the new headquarters has launched a comprehensive local recruitment drive, covering core functions such as business development and local R&D. Additionally, Zhuoyu is actively advancing the construction of data centers.

Simultaneously, Zhuoyu announced a tie-up with the Technical University of Braunschweig (TU Braunschweig) to foster industry-academia collaboration. The joint technical efforts will focus on local development projects such as the ID. Buzz POC, aiming to deeply integrate into the region's established aviation and automotive innovation clusters.

To date, Zhuoyu has collaborated on over 130 vehicle models globally and works with 34 core clients and ecosystem partners, providing mature intelligent driving solutions for enterprises expanding worldwide.

Gasgoo Munich- JAC has officially inaugurated a joint venture plant in Tashkent, Uzbekistan. Developed and operated alongside Tashkent Investment Company, the facility is situated in the Yangi Avlod Industrial Park.

The launch marks a significant step in JAC's strategy to deepen its presence in Central Asia.

Models including the JAC M3, M4, Xingrui, JS8, RF8, T8, and T9 were on display at the opening ceremony, highlighting the company's product strength across both commercial and passenger vehicle segments.

Image source: JAC

JAC is currently accelerating its global expansion to establish a second growth curve.

Since launching its international push in 1990, JAC has evolved from simple product exports to technology transfers, and from serving single markets to establishing a global footprint, gradually building a mature overseas operational ecosystem.

To date, JAC's products reach 132 countries and regions. The company has exported over 1.7 million vehicles in total, operating 27 global production bases and more than 5,000 user centers.

Optimizing both scale and structure has turned overseas operations into a stable source of cash flow and profit. In 2025, JAC exported a total of 221,900 vehicles. Its mid-to-high-end light truck exports held the top industry spot, while pickup exports ranked second, amplifying the company's commercial vehicle advantage abroad.

In 2026, JAC accelerated its global strategy further. The company officially entered the Brazilian truck market with an initial lineup of four models, aiming to capture a 5% local share by 2030. Meanwhile, it launched the European version of the Yiwei 3, leveraging Huawei's overseas channels to tap into high-end customer segments and elevate its global brand influence.

In the first quarter of this year, JAC exported 45,000 vehicles, sustaining a high-growth trajectory. Shipments to countries participating in the "Belt and Road" initiative accounted for over 80% of the total, emerging as the core growth engine for its overseas business.

Gasgoo Munich- D-Robotics has forged a strategic partnership with X Square Robot, according to a report by Gasgoo. The two companies will focus on home scenarios to drive the adoption of X Square Robot's next-generation embodied intelligence foundation model. By deeply adapting and deploying the model on D-Robotics' high-performance edge AI computing platform, the Xuri S600, they aim to build an integrated software-hardware solution that accelerates the mass adoption of service robots in households.

The Xuri S600 is D-Robotics' flagship high-compute chip designed for embodied intelligence. Built on a mature multi-core heterogeneous architecture, it packs 560 TOPS of AI computing power (INT8) and boasts industrial-grade hardware reliability. The chip is built to handle efficient end-to-end inference for complex large models while meeting the strict requirements for low latency and high reliability in home environments.

As a leading player in embodied robotics, X Square Robot is actively pushing robots into household settings. The company previously partnered with 58.com to deploy robots equipped with its WALL-AS model into real homes, where they worked alongside human cleaners. This marked the first global instance of robots entering households to manage complex domestic tasks — and the first large-scale deployment of robots in complex consumer environments.

Image source: X Square Robot

On April 21, X Square Robot expanded its "Robot-in-Home" initiative and began recruiting its first batch of users. Under the timeline set then, 35 days later, a new generation of robots — equipped with X Square Robot's proprietary WALL-B embodied intelligence foundation model and hardware upgrades tailored for home environments — began moving into the homes of these initial users.

WALL-B is an embodied intelligence foundation model based on a unified world model architecture. By integrating vision, language, action, and physics prediction capabilities into a single network and training them jointly from scratch, the model effectively eliminates boundaries and information loss between modules.

Recently, this batch of robots has begun entering actual homes, kicking off an "internship period" for embodied intelligence in daily life.

To better integrate robots into the home ecosystem, X Square Robot recently announced a joint venture with Holike called Guangdong Zhimiliangbian Robot Co. Holike's wholly-owned subsidiary, Guangzhou Laimi Technology Investment, holds an 80% stake, while X Square Robot Technology (Shenzhen) owns the remaining 20%.

Leveraging Holike's reach to nearly 100,000 renovation customers annually, its nationwide distribution network, and its proprietary connection technology, the partnership aims to bring embodied intelligence to a much broader user base.

Gasgoo Munich- The new MG 4X hit the market on May 27, according to Gasgoo. Notably, the new MG 4X 510 Semi-Solid State Smart Enjoyment Edition and the 610 Smart Enjoyment Edition are both powered by Horizon Robotics' Journey^®6E smart driving chip.

This collaboration marks another deep implementation between Horizon Robotics and SAIC Motor, following the Journey^®6E's integration into several of the group's popular models in August 2025. The move further validates the product strength and market recognition of the Journey^®6E.

Built on SAIC's Nebula dedicated EV platform, the new MG 4X employs a rear-motor, rear-wheel-drive layout and a five-link independent suspension. With a stable chassis and smooth handling, the vehicle is suited for scenarios ranging from city commutes to family road trips, boasting a maximum CLTC range of 610 km.

Image Source: Horizon Robotics

On the intelligent driving front, the MG 4X leverages the Journey^®6E chip paired with a large model optimized for Chinese road conditions. Its highway NOA can accurately predict the intent of other road users and actively avoid obstacles, while smart parking supports full-scenario capabilities including DIY parking, dead-end parking, and low-speed real-time spot detection.

Serving as the core computing foundation for vehicle intelligence, the Journey^®6E utilizes Horizon Robotics' third-generation BPU Nash architecture. It natively supports highway NOA, with Transformer computing efficiency jumping 10-fold compared to the previous generation. This allows it to efficiently support real-time large model operations and adapt to 4D imaging radar and 8-megapixel sensor fusion, providing a reliable guarantee for assisted driving.

The Journey^®6 series has achieved full-matrix, cross-brand coverage across domestic and international markets. Multiple chips across the series have secured designations for over 400 models from more than 40 partner brands, serving over 6 million vehicle owners. They are also equipped in numerous export vehicles, marking a comprehensive global rollout.

The partnership between Horizon Robotics and SAIC Motor dates back to 2017. In 2019, SAIC participated in Horizon's Series B funding round, and the following year, the two sides established the SAIC-Horizon Joint Laboratory, laying the foundation for long-term R&D collaboration. Currently, a wide range of SAIC models feature chips from the Journey^® series, covering everything from Journey^®2 and Journey^®3 to the latest Journey^®6 lineup.

Moreover, the MG ES5, a product of this collaboration, has successfully launched in markets including the UK, Thailand, and Chile, achieving mass production of Horizon's smart driving solutions in export vehicles.

Gasgoo Munich- Jointly organized by Gasgoo and JMEV, the "New Tech · New Ecosystem · New EV" Supplier Technology Exhibition and Supply Chain Matchmaking Event wrapped up successfully on May 28.

Combining technology showcases with closed-door matchmaking sessions, the event highlighted core industry innovations and practical applications. More importantly, it built a bridge between top-tier suppliers and OEMs, creating a pragmatic platform for deep dialogue and precise cooperation.

Notably, several senior executives from JMEV toured the exhibition floor, engaging directly with exhibitors to discuss products, technologies, and potential collaboration opportunities.

Technology Exhibition

The exhibition brought together 22 premium suppliers, focusing on key areas such as the electric powertrain, smart cockpits, chassis, safety systems, and interior and exterior trim. On display were several industry-favored innovations, including 4D millimeter-wave radar, automotive infrared thermal imaging modules, floating BTB connectors, and integrated thermal management valve bodies.

Throughout the event, suppliers engaged in in-depth discussions on technical solutions with procurement and R&D personnel from JMEV, Jiangling Motors Corporation, and Jiangxi Isuzu, exchanging contacts to explore potential business opportunities.

Through these sessions, JIANGLING MOTORS GROUP established initial contact with numerous high-quality suppliers, broadening its pool of potential candidates for future technology selection and supply chain development.

The core value of the exhibition lies in establishing initial connections and enabling face-to-face dialogue, paving the way for follow-up project alignment and in-depth evaluation. At the same time, the event offered a stage for high-quality SMEs to demonstrate their technical capabilities, helping them take their first steps toward entering the supply chains of mainstream automakers.

The list of exhibitors for this event is below. For more details, please visit the Gasgoo Global Automotive Industry Big Data Platform (autodata.gasgoo.com).

Closed-Door Matchmaking Meeting

This closed-door session provided a one-on-one, efficient communication platform for suppliers and JMEV's procurement and R&D teams. It ensured that every participating company could engage in comprehensive, in-depth, and targeted discussions with key decision-makers from the OEM.

Suppliers and the JMEV team held pragmatic dialogues centered on the specific technical requirements of new EV projects. With clear objectives and efficient communication, the event precisely matched supply with demand, minimizing ineffective exchanges and significantly boosting supply chain matching efficiency.

With this, the "New Tech · New Ecosystem · New EV" supplier exhibition and supply chain matchmaking event has drawn to a close. Looking ahead, Gasgoo will continue to leverage its platform resources to collaborate with leading domestic automakers. The aim is to organize more precise, professional, and actionable technical matchmaking events that connect OEMs with parts suppliers, driving the joint R&D and large-scale application of core technologies, and supporting the high-quality, long-term development of China's new energy vehicle supply chain.

Gasgoo Munich- Jiangsu ZERON Technology Co., Ltd. formally filed an application to list on the main board of the Hong Kong Stock Exchange on May 28, according to industry reports. Goldman Sachs (Asia) and Haitong International Capital are serving as joint sponsors.

Image Source: ZERON

The prospectus positions ZERON as a provider of smart and autonomous heavy truck solutions, adhering to a strategy of vertical integration and full-stack in-house development from its inception. Its proprietary "ZERON Autonomous Driving System" utilizes an end-to-end multi-modal large language model (MLLM), which the company claims reduces key system complexity by approximately 95% and cuts data labeling costs by roughly 95% compared to industry averages.

On the hardware front, ZERON's self-developed "Jushi" four-in-one electric drive axle integrates the motor, gearbox, drive axle, and power take-off. This achieves a weight reduction of over 200 kilograms and a peak system efficiency of 94%. Additionally, the company is the first in the industry to mass-produce a multi-source heat pump thermal management system, delivering up to 70% energy savings compared to traditional PTC heating at -20°C. Frost & Sullivan data indicates that the transmission efficiency of its drive axle and the energy efficiency of its thermal management system lead among mass-produced products.

Commercialization is accelerating rapidly. ZERON delivered 1,176 new energy smart heavy trucks in 2025, becoming the fastest emerging new energy heavy truck company globally to surpass 1,000 annual sales. Cumulative deliveries approached 1,500 units by the end of 2025. In the first four months of 2026, sales volume reached 778 units, with new orders totaling 1,002 — a 334.6% year-on-year increase.

Financials are improving in tandem. ZERON's revenue climbed from 1.163 million yuan in 2023 to 124 million yuan in 2024, and further to 522 million yuan in 2025, representing a roughly 448-fold increase over two years. The gross loss margin narrowed significantly from 287.2% in 2023 to 2.5% in 2025, approaching break-even. The company disclosed that it achieved positive operating cash flow in the fourth quarter of 2025.

R&D investment remains elevated. From 2023 to 2025, research expenses were 71.42 million yuan, 116 million yuan, and 126 million yuan, respectively. In 2025, R&D spending accounted for 24.1% of revenue.

Notably, ZERON completed a total of $400 million in financing rounds this March and May. Investors include industrial capital and international long-term funds such as CATL, Temasek, Momenta, NIO Capital, Zijin Mining, Yankuang Capital, Moutai Investment, and Sanhua Holding. These partnerships foster multi-dimensional ecosystem synergy in autonomous driving technology, supply chains, and charging and battery-swapping networks.

ZERON stated that it will continue to accelerate full-stack vehicle development and iterate its autonomous driving algorithms to drive large-scale commercial deployment. The progress of this IPO offers the market a window into the commercial maturity of the smart heavy truck development path.

Gasgoo Munich- On May 28, Qijing—the premium smart vehicle brand jointly developed by GAC Group and Huawei's Qiankun division—released an official statement addressing the controversy surrounding a guest at its recent GT7 interior event. The brand clarified that the individual was merely a "tasting officer," not a spokesperson, and said it had halted the dissemination of related content.

Image source: Qijing Auto

That same day, Su Mang, the former president of Fashion Group and the other party involved, announced through her law firm that she is initiating legal proceedings to protect her reputation.

This 11-day partnership—from announcement to removal—stands as another classic case in the auto industry of a brand swiftly cutting ties over a controversial partner selection.

11-Day Timeline: From Announcement to Takedown

On May 14, GAC Qijing officially announced it had invited Su Mang to serve as the "Chief Aesthetics Tasting Officer" for its new GT7 model, simultaneously releasing videos and posters featuring her. Public records show Su Mang is a prominent figure in China's fashion industry, having formerly served as editor-in-chief of Harper's Bazaar and president of Fashion Group.

Yet, following the announcement, comment sections were quickly flooded with negative sentiment. Netizens linked Su Mang's past controversial remarks to the brand, resurfacing old quotes such as claiming "650 yuan a day for food isn't enough" or saying she "doesn't allow people around her to wear long johns because foreigners will look down on them."

A more direct trigger was a video posted on social media in August 2025, in which Su Mang cooked for 15 relatives of her French husband. This created a stark contrast with the "independent woman" image she had cultivated domestically, where she often described housework as "a prison."

This "double standard" controversy, layered onto a partnership with Qijing—a brand touting "domestic high-end manufacturing" and "Chinese smart engineering"—sparked a boycott. The comment sections filled with sharp mockery, and many potential consumers explicitly stated they would not purchase the vehicle.

Facing the intensifying backlash, Qijing began scrubbing related posters and videos from its channels starting May 25. By May 27, independent media outlets noticed that Qijing had wiped all related materials from the internet, effectively ending the collaboration.

Image source: Screenshot from Su Mang's social media

Notably, as of May 28, the relevant video remained visible on Su Mang's personal social media platforms.

That same day, she instructed the Beijing Xingquan Law Firm to initiate legal proceedings, filing lawsuits for reputation rights against multiple online accounts. She accused them of fabricating false information and engaging in insults and defamation.

Image source: Screenshot from Su Mang's social media

"For a long time, I have endured immense pressure from public opinion," Su Mang stated. "My personal words have been maliciously twisted, and unverified rumors have been fabricated out of thin air. I have always chosen tolerance, believing that the truth will speak for itself. Yet my patience has not brought peace; instead, the insults, defamation, and cyberbullying directed at me have only escalated."

Brand Draws the Line: Not a Spokesperson, Promotion Halted

On May 28, Qijing Auto released an official statement, its first formal response to the incident. The statement explicitly declared: "The guest participated in this event in the capacity of a tasting officer, not as a brand spokesperson for the Qijing GT7."

The brand explained that inviting guests from various fields was intended to spark diverse interpretations of the vehicle. However, considering feedback from netizens and users, it has stopped promoting the related content. Moving forward, Qijing announced that future tasting events will openly recruit tasting officers from its user base, stating, "We wish to hand the microphone and the camera over to you—those who love Qijing and await its arrival."

It is worth noting that Qijing is not the only auto brand to face controversy over an ambassador or "experience officer." Previously, a high-end automaker sparked backlash after inviting Fu Shou'er to film an experience video, leading to the eventual removal of the promotional clip.

The core issue in such cases is that when a partner's public image clashes with brand values, consumers often vote with their wallets far more quickly and fiercely than brands anticipate.

Alongside its statement, Qijing revealed its latest business updates: The GT7 will open for pre-sales on May 29. The first batch of 300 stores is rolling out across 70 cities, including core hubs like Beijing, Shanghai, Guangzhou, and Shenzhen, adopting a dual-format model of "User Centers" and "Experience Centers." As Qijing's debut model, the GT7 is positioned as a "next-generation smart shooting brake," equipped with Huawei's Qiankun full-stack smart technology. Its core selling points are "million-yuan aesthetics, million-yuan handling, and million-yuan intelligence."

Gasgoo Munich- The 2026 China auto market is a study in contrasts: bustling on the surface, but chilly at the core.

On the surface, green license plates are everywhere, the penetration rate of new energy vehicles keeps climbing, and new models are launching one after another—the market looks vibrant. But beneath the surface, a profit dilemma is hard to ignore. Latest data shared by Cui Dongshu, secretary-general of the China Passenger Car Association (CPCA), shows the auto industry's profit margin dipped further to 3.4% in the first four months of 2026.

Image source: Cui Dongshu (same below)

Despite the influx of new vehicles on the street, automakers and their supply chain partners are feeling the pinch. Revenue inched up 1.1%, but costs climbed 2%, causing profits to plunge 17%. This isn't just a numbers game on paper—it's a warning signal for the health of the entire industrial ecosystem.

Viewed historically, 3.4% isn't unprecedented. Data shows margins hit 3.2% in February 2023, 3.4% in September 2024, and slipped to 3.3% in November 2024. By December 2025, they had fallen to 1.8%. In other words, the industry has been struggling around the 3% level for years, occasionally dipping to much lower depths.

When scale expansion no longer translates into profitability, we have to ask: in this massive industrial chain, exactly who is capturing the profits?

Squeezed from Both Sides: Auto Makers Trapped in a Profit Squeeze

The industry's current predicament can be described as a squeeze from both sides. Cui notes that as production scales up and the PPI rises, upstream sectors like non-ferrous metals and oil have seen profits surge, while end-users are holding off on purchases due to various factors. Caught in the middle, OEMs are under unprecedented pressure.

First, look at the widening gap between income and spending. According to Cui, the auto industry's total revenue for January through April 2026 was 3.3129 trillion yuan, a slight 1.1% year-on-year increase. That slight gain came at a high cost: brands were competing intensely on price, specs, and service. Yet, the price was steep: total costs hit 2.9404 trillion yuan, up 2% year-on-year. This rapidly devoured what were already thin margins.

This explains why sales figures look decent, but a glance at the profit statement reveals many companies are sacrificing profits for market share. Traditional internal combustion engine (ICE) players are under pressure on two fronts—fighting price wars to maintain share while pouring billions into new tech R&D. Profits, naturally, are suffering under the weight.

Cui's data clearly reveals this long-term slide. In 2014, the industry's sales profit rate hovered around 9%. By 2024, it fell to 4.3%, slipped to 4.1% in 2025, and hit 3.4% in the first four months of 2026. While April's single-month 3.7% was slightly better than the first quarter, the long-term view shows a 3% margin has become the norm. December 2025's 1.8% was the low point.

A telling detail is the shift in profit per vehicle. Data shows that from January to April 2026, the average revenue per vehicle in the industrial chain was 342,000 yuan, up 6% year-on-year. But costs rose in tandem to 303,000 yuan, up 6.93%. Cost growth outpaced revenue, leaving a gross profit of just 12,000 yuan per vehicle—down 12.1% year-on-year. This means the margin manufacturers can actually retain is shrinking rapidly with every car sold.

Notably, in the broader downstream industrial sector, auto is practically lagging behind. The average profit margin for downstream industries from January to April was 6.1%; auto managed just 3.4%, less than half. Compared to high-profit sectors like alcohol, tobacco, and pharmaceuticals, building cars has become a low-return business—massive resource input, huge pressure, and very little profit to show for it.

Upstream Profits Surge, Battery Costs Soar: Who Is Capturing the Value?

With manufacturers under constant pressure, a natural question arises: where is the money flowing? Looking at profit distribution across the chain, upstream mining and power batteries are indeed capturing the larger share.

The furthest upstream, the mining sector, is generating substantial profits. Cui's analysis points out that from January to April 2026, mining profits jumped 26% year-on-year, with margins staying at a high 20.5%. Non-ferrous metals—crucial for autos—saw profits surge 40.8%, while the oil sector grew 32.3%. High prices for commodities like metals and oil are directly driving up the base cost of manufacturing.

NIO CEO William Li, speaking at a recent ES9 media event, noted that raw material costs—including nickel, cobalt, and lithium carbonate—have risen this year, adding over 10,000 yuan to the cost of a single car. He mentioned that commodities and memory chips affect more profitable, faster-growing industries too, leaving automakers with little bargaining power. Memory prices haven't dropped since rising, and raw material cost hikes won't ease in the short term—costs companies must absorb themselves.

This trend of profit concentrating upstream essentially creates a squeeze on the mid- and downstream. When raw material prices surge, mid-stream manufacturers often have limited room to negotiate and must absorb most of the pressure. Just as if flour and sugar prices spike, a baker cannot easily pass that on to customers and must shoulder the burden first.

The battery equation is even more direct. Cui points out that while lithium battery export prices are falling, domestic battery prices have soared. The problem for automakers that don't make their own batteries is severe, leading to a sustained slide in profits.

This accurately identifies the issue. The logic is stark: even though export prices for lithium batteries are dropping, robust domestic demand and cost pass-throughs from upstream lithium carbonate mean domestic procurement prices remain stubbornly high. For most automakers lacking in-house battery production, battery procurement is a fixed cost—typically accounting for 30% to 40% of the vehicle's total cost, if not more.

This means a significant chunk of vehicle margin is constrained by battery costs. It also explains why leaders like BYD, Great Wall Motor, Geely, and GAC Aion are accelerating the construction of their own battery plants. Through vertical integration, automakers can regain some control over costs and profits.

Another signal worth watching: as end-market competition intensifies and price wars persist, automakers have little room to raise prices, while upstream raw material and battery costs remain inflexible. This pressure from both ends makes profit statements fragile. If sales fluctuate or raw material prices rise further, companies already hovering near the break-even point could face severe cash flow strain.

But is upstream solely to blame for the profit slide? The answer isn't that simple. In fact, two other pressures are eroding margins: the endless price war—where companies trade profit for market share—and the strategic costs of energy transition—massive R&D spending booked now for future returns. These three combined create the current low-margin trap.

Saying Goodbye to Cutthroat Growth: How to Find New Profit Levers?

Facing shrinking margins and profits being eroded by upstream and downstream alike, the industry stands at a crossroads. The old extensive growth model—trading profit for volume—has clearly run its course. As the government pushes back against excessive competition, the sector is hunting for new profit pillars.

The call to end internal rivalry isn't coming from nowhere. Since 2025, from the Ministry of Industry and Information Technology to the Ministry of Commerce and local associations, efforts have been made to guide the industry away from disorderly price wars. The realization is growing that long-term internal conflict weakens R&D innovation and ultimately hurts the competitiveness of China's auto industry.

Specifically on how to break the deadlock, calls for fuel-electric parity are becoming reality. For years, NEVs enjoyed purchase tax exemptions, traffic privileges, and other perks. While necessary to nurture the market, NEV penetration is now high enough that the market has some self-sustaining drive.

Pushing for parity lets ICE and NEVs compete on a level playing field. This stabilizes the ICE base, easing transition pains for traditional automakers, while forcing NEV players to compete on product strength rather than policy handouts. This weeds out inefficient capacity reliant on subsidies. Cui has repeatedly stressed that stabilizing ICE consumption and promoting scrappage are vital for healthy industry development.

Second, automakers need to prioritize control over core supply chains. The choices of some leaders suggest the future competition isn't just about models and intelligence, but about supply chain mastery and cost control. BYD's vertical integration model—using self-developed batteries to cut costs—offers a viable path. Thus, self-developed batteries and vertical integration are becoming strategic options for more top-tier automakers.

Of course, there are dissenting voices. Some automakers believe external supply chains are mature enough and that the ROI on self-development remains unproven. But one thing is certain: balancing battery control with ROI is a test every automaker must answer.

Third, shifting from price wars to technology and value competition. As lithium carbonate prices rationalize and battery tech matures, the next growth opportunity will be intelligence. High margins never come from specification stacking, but from unique tech experiences. Whether it's smart driving deployment or smart cockpit ecosystems, those who can create new revenue streams from software and services will escape the low-margin trap of selling hardware alone.

Finally, consumers need to face a reality: rock-bottom prices are often unsustainable. If an industry operates with minimal profit or loss for too long, product quality, after-sales service, and future R&D will become unsustainable. Allowing companies reasonable profits ensures a positive cycle for the entire ecosystem.

Conclusion

The data shared by Cui Dongshu puts this recurring issue front and center: scale is up, profits are down. A 3.4% margin isn't the most extreme we've seen recently, but hovering around 3% for so long signals a structural trap, not a temporary blip.

For visionary automakers, the real moat isn't the few thousand extra units on a sales chart. It's autonomous control over core tech—whether battery cells, autonomous driving algorithms, or brand premiums that survive cycles. Those who build advantages in these dimensions are the ones likely to survive the second half—and thrive.

Gasgoo Munich- On May 28, BYD dropped a bombshell on the industry with its "Dare to Act" intelligent strategy launch. While nearly all automakers were still fixated on comparing computing power, radar counts, and mileage between takeovers, BYD chose a radically different breakout path: underwriting the safety liability for city navigation assistance.

This was not a simple feature upgrade or a marketing stunt, but a strategic move aimed directly at the industry's pain points. BYD is aiming to lead a new trend: shifting the competition from technical specifications to accountability. Whoever first solves the trust crisis—where users are afraid to use the tech—will control the narrative on mass adoption in the second half of the intelligent driving race.

Image Source: BYD

BYD's Safety "Double Underwriting"

China's auto market is currently at a critical juncture for the mass adoption of driver assistance systems transitioning to city navigation. Yet, a paradox remains: the more advanced the technology, the more hesitant users become. Frequent reports of accidents, unclear liability boundaries, and expensive, complex insurance policies have together built an invisible psychological barrier.

Many owners of high-end intelligent driving vehicles rarely use the features, limiting themselves to highway stretches and approaching complex city streets with trepidation.

The core highlight of BYD's event was a precise strike at this market pain point.

Following its underwriting of smart parking safety, BYD is again pledging to cover city navigation safety for one year. From now on, new users of the "God's Eye" A and B versions, and existing owners upgrading to version 5.0 via OTA, are covered. If an at-fault accident occurs while compliantly using the city navigation function, BYD will cover the direct economic loss—completely free, with no cap, and without affecting next year's commercial insurance premiums.

The impact of this decision must be viewed against the industry backdrop.

Previously, the industry standard was "smart driving insurance"—a paid commercial product with deductibles and caps. BYD's underwriting shifts the liability from the user and insurer directly to the automaker. It is not just marketing innovation, but a promise rooted in extreme technical confidence: removing the worry of "trying something new."

This confidence isn't unfounded. It is backed by three "firsts among Chinese automakers": a fleet of over 3.15 million vehicles equipped with driving assistance, daily data generation exceeding 200 million kilometers, and a R&D team of over 5,000 people.

Scale brings data; data feeds algorithms; algorithms ultimately support a clear understanding of the system's capabilities and limits.

More significantly, the "double underwriting" mechanism—covering both parking and driving—makes BYD the first global automaker to offer safety commitments for both core intelligent driving scenarios. This effectively builds a closed loop of user trust: users build confidence in parking, the most common and anxiety-inducing scenario, and then dare to use city navigation more deeply while driving.

Only when users actually engage frequently does data flow back and technology iterate, creating a positive cycle of "use-trust-wider use." The ultimate goal is to transform driver assistance from a showroom highlight into an indispensable feature, truly fulfilling the promise of letting everyone enjoy good technology with peace of mind.

BYD's Self-Developed 4nm Intelligent Driving Chip

If safety underwriting is BYD's breakthrough on the user front, the release of the Xuanji A3—China's first 4nm intelligent driving chip—is its strategic layout at the technical foundation. Together, this software-hardware combination reveals the complete logic of BYD's intelligent evolution.

Image Source: BYD

In the first half of the electrification era, BYD took the lead through full control of batteries, motors, and electronics. Now, in the second half focused on intelligence, the chip is undoubtedly the core "choke point." The global market for high-end intelligent driving chips is dominated by international giants like Nvidia and Qualcomm, leaving domestic automakers facing the dual pressure of supply chain risks and high costs.

The Xuanji A3, launched by BYD, uses a 4nm automotive process. Its computing power consumption per unit is 20% lower than comparable products, and through the collaboration of three chips, it achieves total computing power exceeding 2,100 TOPS. Mass production has already begun.

The strategic significance of this release can be interpreted from several dimensions.

First, it represents a major breakthrough in supply chain security. Amid rising global uncertainty, possessing a self-developed high-end automotive-grade chip means BYD has shed its dependence on single external suppliers for core technologies. This guarantees supply stability and cost control for intelligent driving solutions across both entry-level and premium models.

Second, it achieves extreme software-hardware coupling. General-purpose chips often require adaptation for different automakers' algorithms, resulting in efficiency losses. The Xuanji A3 is deeply optimized for BYD's proprietary algorithms, claiming a 100% increase in computing power utilization. This means the same physical computing power delivers faster response times and stronger capabilities in complex scenarios.

Finally, a more powerful chip prepares for the mass production of L3/L4 high-level autonomous driving. The chip's computing redundancy and architectural design point directly toward future regulatory and scenario requirements.

Viewing the chip and "underwriting" strategy together, BYD's strategic intent becomes clearer: use self-developed chips to lower hardware costs, enabling high-end intelligent driving to be affordable across the entire model lineup; then use underwriting to eliminate user hesitation. This strikes at another market pain point: many automakers bundle high-end driving features only with top trims or charge tens of thousands for options, turning advanced tech into a toy for the few. BYD's strategy leverages its massive sales volume to amortize R&D costs, then feeds sales with affordable option prices, creating a virtuous spiral of scale and cost advantage.

Image Source: BYD

From the underlying electronic-electrical architecture and chips to upper-layer algorithms and user interaction (like the "DiDi Xia" intelligent agent), BYD's full-link evolution of "vehicle intelligence" contrasts sharply with industry paths that focus solely on software or stacking hardware. It emphasizes the stability, reliability, and efficiency of the system as a whole.

BYD Redefines the New Playing Field

BYD's new intelligent strategy is bound to cast a shadow over the competitive landscape of the Chinese auto market. It may quietly rewrite the rules of the domestic intelligent driving game, shifting competition from the parameter wars of recent years to a new dimension: the battle of responsibility.

In recent years, industry competition has been highly homogenized: rivals battled over who had higher computing power, more radar lines, more cities covered, or longer mileage between takeovers. While this drove rapid iteration, it also created a bubble of specs. Users found in practice that high computing power doesn't equal a good experience, wide coverage doesn't mean constant availability, and long takeover distances don't guarantee absolute safety.

When actual experience diverges from marketing rhetoric, a crisis of trust inevitably follows.

BYD's safety underwriting effectively shifts the focus of competition from "how strong my technology is" to "how much responsibility I dare to take for it."

This is a radical shift from product-centric thinking to user-centric thinking. It forces the industry to reconsider a fundamental question: for the average consumer, is the primary measure of good intelligent driving technology the peak computing spec, or the cost and risk they bear when an accident happens—or doesn't happen?

BYD has provided the answer with action: the latter.

Image Source: BYD

It is foreseeable that this move will exert immense strategic pressure on competitors. If BYD's "double underwriting" strategy proves effective in the market—significantly boosting usage rates and reputation—rivals will face a dilemma. Following suit means bearing huge potential compensation risks and financial strain, a severe test of system reliability and cost control. Not following suit risks creating a perception that "BYD dares to take responsibility, while others do not." In an environment where accidents still make headlines, that perception gap could directly sway purchase decisions.

Notably, BYD's underwriting is "free, unlimited, and doesn't affect premiums"—a stark contrast to the paid smart driving insurance common in the industry. The latter is essentially risk transfer, while the former is assuming responsibility. Consumers are likely to magnify this difference, using it as a key yardstick to judge an automaker's technical confidence and sincerity.

Furthermore, BYD offering high-end city navigation at a low price across its lineup will accelerate the reconstruction of market value. When mainstream brands make advanced driving tech an affordable option, brands that still bundle it as a costly add-on or reserve it for top trims will see their competitiveness take a direct hit. The entire industry may be forced to accelerate the standardization and cost reduction of intelligent driving hardware—ultimately benefiting the consumer.

Summary:

BYD's strategic release is not an isolated technical display, but a combination punch: using the Xuanji A3 chip to solve cost and supply issues, using universal availability to solve adoption, and using safety underwriting to solve trust.

These three elements are interlinked, aiming for a single endpoint: transforming intelligent driving into a standard experience that users take for granted and rely on—just like seatbelts and airbags.

"True 'daring' is not fearlessness," BYD Chairman Wang Chuanfu said at the conference. "It is having reverence for life, rules, and technology, and doing what is difficult precisely because you know it is hard." This is the spiritual core of BYD's strategy. On the road to popularizing intelligent driving, technical barriers are perilous, but the barriers of the human heart are harder to cross.

BYD has chosen a path of exchanging hard cash for user trust. Once this path succeeds, the moat it builds in the intelligent era will be far wider and deeper than any technical parameter.

Future market competition will no longer be about who runs faster, but who can make users feel safe enough to take their hands off the wheel. BYD has already drawn the starting line on this new track.

Gasgoo Munich- XPENG released its first-quarter 2026 earnings on May 28.

Deliveries climbed to 62,682 units, driving total revenue to 13.03 billion yuan. Automotive sales contributed 11.0 billion yuan, while service and other revenue jumped 41.2% year-on-year to 2.03 billion yuan. Gross margin for the quarter hit 20.6% — a 5-percentage-point increase from the same period in 2025. By the end of the quarter, cash on hand stood at 42.09 billion yuan.

Image Source: XPENG

In the earnings report, Chairman He Xiaopeng outlined a busy roadmap: following the GX launch, four new models will enter the delivery cycle in 2026. He also confirmed the timeline for mass production of both Robotaxis and humanoid robots, set for completion this year, as the company pushes to commercialize "Physical AI" technology.

Vice Chairman Brian Gu attributed the sustained 20%-plus gross margin to cost controls enabled by proprietary technology and growing overseas revenue. He emphasized that scaling the commercialization of Physical AI applications is now a strategic priority.

XPENG moved aggressively on the product front in the first quarter. January saw the release of four models: the 2026 P7+, the G7 Super Range Extender, the G6, and the G9. Both the Ultra and Ultra SE trims feature the second-generation VLA architecture and the Tianji AIOS 6.0 system. In March, the all-electric 2026 X9 hit the market, aligning with the Super Range Extender version in intelligence, range, and safety. On March 6, the G6 Super Range Extender launched at 186,800 yuan. This was followed by the April 2 debut of the 2026 MONA M03, priced from 119,800 yuan. Then, on May 20, the full-size flagship SUV GX officially launched. Offering both pure electric and Super Range Extender powertrains, the GX starts at 269,800 yuan with limited-time benefits and racked up 24,863 binding orders within 12 hours.

Image Source: XPENG

On the intelligent driving front, XPENG rolled out its second-generation VLA system to users in March. The company reports that smart driving accounted for over 50% of mileage in the first month — meaning the system handled more than half of actual driving distances. XPENG views this as a turning point, marking the shift of advanced intelligent driving from an optional feature to a core factor in purchase decisions.

Meanwhile, XPENG's first fully in-house, mass-production Robotaxi rolled off the assembly line in Guangzhou on May 18. Built on the GX platform, the vehicle uses a vision-only approach, equipped with the proprietary second-generation VLA model and four Turing AI chips delivering 3,000 TOPS of effective computing power. The system operates without high-precision maps or LiDAR and supports cross-city deployment. XPENG plans to launch passenger demonstration operations in Guangzhou in the second half of 2026.

Additionally, construction began in February on a mass-production base for the IRON humanoid robot in Guangzhou's Tianhe District. Covering approximately 110,000 square meters, the facility is scheduled to achieve mass production by the end of 2026, with the robots set to enter XPENG retail stores as shopping guides in the first quarter of 2027.

Given the current market environment, XPENG forecasts total deliveries for the second quarter of 2026 to range between 100,000 and 106,000 units — a sequential increase of 59.5% to 69.1%. Total revenue is projected to land between 19.60 billion and 20.80 billion yuan, representing a quarter-on-quarter jump of 50.4% to 59.6%.

Gasgoo Munich- On May 29, at the Future Mobility Pioneer Conference, NIO founder and Chairman William Li declared the automotive sector has entered a new era defined by four distinct characteristics.

First, the industry has entered the "final stage" — and the most brutal competition has arrived. From January to April, domestic auto consumption fell 18.9% year-on-year, while retail sales in the first few weeks of May saw the decline widen to over 24%. Even brands with superior technology and products face severe market tests. Li believes the next year or two will be fiercely competitive; although the price war is fading, sales pressure is mounting in the absence of price incentives.

Second, the inflection point for battery-electric vehicles is accelerating. In April, the domestic penetration rate of new energy vehicles hit 65.4%, with pure electrics accounting for 68.9% of that mix. Pure electrics have now become the dominant powertrain and continue to grow rapidly. Compared with last year, pure EV penetration has surged by more than 10 percentage points, with demand rising across every market segment.

Third, the market is shifting from a period of brand "infancy" to maturity. Smart EV technology is converging: powertrains are settling on pure electricity, replenishment on charging, and electronic-electrical architectures on central integration with zone control. Convergence is also happening in sensors and computing power. As products mature, buyers are looking beyond simple specifications and range to focus on the full-scenario experience, meaning brand value is playing an increasingly critical role.

Fourth, competition is moving from relying on a "single competitive edge" to a battle of systems. Given the immense length of the automotive supply chain, isolated breakthroughs cannot sustain overall competitiveness. To survive the final stage, companies must build comprehensive system capabilities across the entire chain — from R&D, supply chain, and manufacturing to user service and digitalization.

Gasgoo Munich- On May 28, the all-new Geely Xingyuan launched with a limited-time price range of 61,800 to 91,800 yuan. Across the lineup, driving range increased to between 410 and 480 kilometers. The vehicle features CATL battery cells and the Flyme Auto 2 system—notably integrating highway NOA into a car priced under 100,000 yuan.

With over 700,000 units delivered in 573 days and the title of the best-selling model across all categories in 2025, the previous Xingyuan demonstrated the market's potential. The new version signals that the level of competition for A0-segment pure electric small cars has risen yet again.

In fact, the Xingyuan update reflects the broader wave of vehicle launches targeting the A0 segment in 2026.

That same month saw the debut of the refreshed BYD 2026 Seagull, marking the first introduction of LiDAR to the A00-class market. Earlier, the Leapmotor A10, Wuling Binguo S, and Chery QQ3 also launched.

It is rare in automotive history to see such a concentration of new model launches and technology migrating to a price range below 100,000 yuan.

Prices Keep Hitting New Lows

The 50,000 to 90,000 yuan range is the core battleground for A0-segment electric small cars—and one of the most fiercely competitive segments currently.

In the first quarter of 2026, sales of A0-segment electric vehicles surged 190% year-on-year—far exceeding the 66% growth in the A-class and the 120% in the B-class. Almost every major automaker has entered the market.

The intense competition in this market is reflected first in the battle over price and driving range.

The BYD 2026 Seagull offers a range of 505 kilometers with a starting price of 69,900 yuan; the Wuling Binguo S, launched in March, increases range to 525 kilometers; and the Chery QQ3 lowered the entry price to 58,900 yuan. Meanwhile, the new Xingyuan reduced its starting price from 69,800 yuan to 61,800 yuan despite a comprehensive range upgrade—dropping rather than rising.

Image Source: Geely Xingyuan

A year ago, the mainstream range for A0-class vehicles was just over 300 kilometers; today, 400 kilometers is the baseline.

Yet, price and range are merely the basics. The focal point of competition in the 2026 A0 market has shifted to the integration of intelligent features.

Leapmotor's A10 integrates a Qualcomm 8295 chip and LiDAR in a model starting at 65,800 yuan; the 2026 Seagull introduces LiDAR to this class, enabling advanced driver assistance at the 90,000-yuan level as an option; and the new Xingyuan is equipped with the Qianli Haohan H3 solution, featuring highway NOA as standard.

Owning a vehicle with LiDAR and a high-computing chip for under 70,000 yuan was unthinkable two years ago. As autonomous driving technology migrates from luxury vehicles priced at 200,000 to 300,000 yuan to the entry-level market, the industry is re-evaluating structural cost boundaries.

Driving dynamics and safety are also emerging as new battlegrounds.

The new Xingyuan achieved a moose test speed of 80.7 km/h and a fishhook test speed of 130 km/h, with a roof crush strength 3.4 times the vehicle's weight. The Chery QQ3 comes standard with liquid cooling and independent suspension across the lineup, while the BYD 2026 Dolphin features upgrades to CTB (Cell-to-Body) technology and a four-link independent suspension.

In the cost-sensitive A0 segment, features previously reserved for higher-class vehicles are accelerating their adoption.

From "City Runabout" to "Full-Scale Competition"

The escalation of competition in A0 electric cars reflects structural shifts across the entire new energy vehicle market.

In April 2026, the retail penetration rate of new energy passenger vehicles in China exceeded 60% for the first time, reaching 61.4%. As new energy vehicles enter the mass market, user expectations have risen. Consumers are no longer satisfied with vehicles that provide basic mobility; they demand adequate range, current intelligence, uncompromising safety, and solid driving dynamics.

This shift in demand has spawned a trend where "value competition" is replacing "price competition."

In the A0 segment, the deciding factor used to be the "lowest price," but now it is "who offers more for the same price."

Behind the new Xingyuan's more than 100 product upgrades and over 25 segment-exclusive features lies this logic.

Leapmotor's A10 uses proprietary cost control to bring 150,000-yuan-level intelligent features into the 60,000-yuan market; Chery's QQ3 highlights "no compromise on safety or specs"; and Wuling's Binguo S differentiates itself with superior range. Fundamentally, they are responding to the same demand: securing a more complete product experience with a smaller budget.

A deeper shift is occurring: A0 electric cars are becoming a "testing ground" for automakers' systemic capabilities.

In a segment where cost control is paramount, the ability to deliver class-leading intelligence, battery technology, and manufacturing craftsmanship proves a company's strength.

Image Source: Geely Xingyuan

Geely's Xingyuan, moving from domestic sales champion to the top three in global new energy vehicle sales in the first quarter of 2026, confirms the global potential of A0-segment products.

In global emerging markets, the 60,000 to 100,000 yuan price range represents massive untapped demand. The cost control and technology migration capabilities Chinese automakers have accumulated in the A0 segment are poised to become key levers in global expansion.

But intensifying competition brings new challenges.

In February 2026, BYD Seagull sales plunged 78.1% year-on-year, briefly dropping out of the monthly top ten. This revealed that even former benchmarks cannot remain secure under such concentrated competition. In April, among the 15 models with wholesale volumes exceeding 20,000 units, only four pure electric mini and small cars remained: the Xingyuan, Yuan UP, Seagull, and Dolphin. The concentration effect at the top is becoming increasingly pronounced.

As product iteration cycles shorten, maintaining accuracy in product definition and stability in the supply chain amid such rapid turnover will be a question all entrants must answer.

The intense race in the A0 segment is far from over.

Gasgoo Munich- The market share of traditional internal-combustion engine vehicles is shrinking by 10% to 15% annually, leaving most automakers grappling with margin pressures. Xiang Xingchu, Party secretary, chairman, and general manager of JAC Group, made the remarks at the Future Car Pioneer Conference on May 29, as reported by Gasgoo from the event.

Meanwhile, the traditional boundaries dividing the industry's upstream and downstream are dissolving. Automakers and parts suppliers are moving beyond joint technology development toward deeper ecosystem integration — a shift that demands cross-sector collaboration.

Image source: Gasgoo

Chinese brands, he noted, are seizing a golden opportunity for a historic rise. The driving force is the transition toward smart new-energy vehicles — a shift that can only reach its full potential in a market like China's. That potential rests on four pillars: the institutional edge of a nationally coordinated innovation push; a comprehensive, deeply rooted manufacturing sector; a vast pool of engineers; and a consumer environment that actively embraces innovation.

China's auto industry, he argued, stands at a critical juncture — transitioning from sheer scale to true competitive strength. No company can cross that threshold alone. The only viable path forward lies in sharing value, aligning interests, and building consensus.

Gasgoo Munich- Li Chuanhai, vice president of Geely Auto Group, rejected the idea of industry homogenization on May 29. "Some say the sector is severely homogenized. I disagree," he said at the Future Auto Pioneer Conference.

AI technology offers vast possibilities for the auto industry. Breakthroughs remain possible, from future cabins acting as portals to fully autonomous driving.

Photo source: Gasgoo

Top AI talent largely joins large language model companies. Traditional automakers struggle to compete in hiring. Geely's solution is "ecosystem co-creation." The company partners with StepFun and Ecarx to advance full-domain AI. This leverages a broader ecosystem to build talent density.

Geely rejects the view that the industry is hitting a technological ceiling. The car is the fastest vessel for "embodied intelligence." As Level 3 and Level 4 autonomy expands, AI will shift from "driving" to "serving." Future cabins will phase out standalone apps. Super-intelligent agents will directly connect services.

Systematic innovation relies on three elements: investment, ecosystem synergy, and talent density. Geely Auto Group has implemented a long-term AI strategy. The company sustains investment and fosters collaboration. It aggregates talent to build the world's only smart vehicle computing alliance.

China will become a true automotive powerhouse when more brands establish global roots. Li added that the world must rely on Chinese technology and standards.

Gasgoo Munich- Seres Group Chairman Zhang Zhengping took the stage at the Future Mobility Pioneer Conference on May 29 to outline the AITO brand's philosophy, achievements, and future roadmap, according to a report from Gasgoo.

Photo Source: Gasgoo on-site photography

Zhang emphasized that AITO is driven by the philosophy of "redefining luxury through intelligence." Since joining forces with Huawei in 2021, the brand has secured broad market recognition over the past five years. It delivered its 1 millionth vehicle in just 46 months, securing a spot among the top 100 global automotive brands by value this year—the only Chinese marque to break into the top 10 global luxury rankings. Notably, the AITO M9 has dominated China's 500,000 yuan segment for two consecutive years and stands as the sole new energy vehicle selected for the "China Manufacturing Speed Achievement Exhibition."

When it comes to premium standards, AITO prioritizes reliability. Its super factory boasts 100% automation in body manufacturing and employs a "one car, one file" system for full production traceability. Since the start of this year, vehicles rolling off AITO's production lines have undergone automated, unmanned testing—resulting in the lowest risk rating on quality lists for energy-saving and new energy vehicles.

High performance, according to Zhang, stems from intelligent driving. To date, users have logged more than 7.7 billion kilometers using the assisted driving system, with a user base exceeding 537,000. During this year's May Day holiday alone, intelligent driving accounted for over 52% of driving in the AITO M9.

Looking ahead, Zhang pledged that AITO will deepen its cross-sector partnership with Huawei. Working alongside users and partners, the company aims to solidify its product lineup, refine its ecosystem, and deliver a leading smart mobility experience.

Gasgoo Munich- Addressing the Future Mobility Pioneers Conference on May 29, Avatr Chairman Wang Hui argued that while electrification was the industry's opening act, intelligence is the main event. The new energy sector is gripped by fierce competition—not just over prices, but over technology, specs, and ecosystem services—putting immense pressure on the industry's health. In 2025, domestic auto sales surpassed 34.4 million units, yet profit margins stood at just 4.1%; by the first two months of 2026, that figure had slipped further to 2.9%.

"The consensus in the auto industry is that everyone has been making the same moves for the past three to five years, so hyper-competition became the simplest, most direct path forward," he said. "It’s not just about prices; it’s also about configuration and services. But in the end, you aren't competing against rivals—you're cannibalizing your own profits."

"Sales volume without profit is 'fake volume,' and the scale gained through price wars is nothing but false prosperity," Wang declared.

Facing these challenges, Avatr has outlined a strategy centered on three "value leaps":

First, shifting from volume sales to crafting premium products. Changan Group streamlined its lineup from 63 to 36 models to concentrate resources on creating blockbusters. Avatr, positioned as a high-end smart EV brand covering the 250,000 to 700,000 yuan price bracket, saw its average selling price in April rise by 20,000 to 30,000 yuan compared to the previous generation. A flagship SUV is set to follow.

Second, moving beyond tech specs to prioritize safety. In March, Avatr unveiled its "Taihan Position" technology, featuring distributed electric drive that allows the vehicle to maintain control even during a blowout at 220 km/h.

Third, transitioning from design imitation to original, profitable design. Avatr is committed to originality, operating design hubs in Munich and Shanghai that bring together over 200 top global designers. User feedback has been positive. The company showcased its second-generation concept car at the Beijing Auto Show this year.

On the global front, Avatr has expanded into more than 40 countries and regions, achieving strong results in Thailand and Dubai, UAE. The company has already reached stable profitability, validating its high-end strategy. Wang Hui revealed that Avatr will officially enter the European market by the end of this year.

Gasgoo Munich- On May 28, VOLANT successfully executed the first manned transition flight of its VE25-100 passenger eVTOL in Zigong, Sichuan. The milestone makes it the first Chinese eVTOL developer to achieve this feat.

Image Source: VOLANT

This successful manned transition flight marks a major engineering breakthrough for the VE25-100 program and signals a significant step forward in China’s core eVTOL flight technology. The maneuver validated the maturity and reliability of the aircraft's flight control, propulsion, and aerodynamic systems, positioning the project's development pace among the global leaders.

Building on this achievement, the team will accelerate subsequent test flights, airworthiness certification, and product iterations. The goal is to solidify its technical edge and steadily advance toward commercial operations.

Notably, on May 27, VOLANT closed a C+ funding round worth nearly 1 billion yuan. This marks the company's second major fundraising in under a month, following a $300 million round secured in late April.

The C+ round was led by China Life Sci-Tech Innovation, with participation from Shanghai Minhang Investment, NIO Capital, Cornerstone Capital, and existing shareholder China Internet Investment Fund. Huaxing Capital and Kunlun Capital served as financial advisors, with Kunlun Capital also acting as the company's long-term financial advisor.

VOLANT founder and CEO Dong Ming stated that the proceeds will primarily fund ongoing test flights and airworthiness certification. He added that the company plans to leverage its expanding shareholder base to integrate supply chain resources, aiming to launch compliant commercial operations as soon as possible.

Gasgoo Munich- On May 29, at the Future Mobility Pioneer Conference, Xu Jun, senior vice president and chief operating officer of Zhejiang Leapmotor Technology Co., Ltd., argued that the current obsession with stacking specs has led to market homogeneity and a weak consumer experience. For instance, boosting driving range is rarely a necessity in real-world scenarios.

In his view, specs are merely table stakes. The real battle is won by meeting user needs and creating value — a metric that requires rethinking the definition of success.

Image Credit: Gasgoo on-site photo

User needs currently fall into three categories: undiscovered, defined but unmet, and oversupplied. Automakers should guide consumers toward the undiscovered, satisfy the defined, and avoid over-delivering on the rest.

Meanwhile, the auto market suffers from oversaturation. Just as smartphone users ignore at least 50% of features, drivers face a similar glut. What consumers actually want is a mobility solution that is fast, high-quality, and cost-effective. The optimal path for today’s automakers lies in meeting needs precisely — no more, no less.

Xu Jun noted that while consumers won’t buy without a price war, companies must keep innovating to cut costs. Balancing consumer demand with production economics is essential to turning a profit.

Gasgoo Munich- On May 29, Xynova has officially closed its Series A round, bringing total fundraising to nearly 1 billion yuan. The round was led by Li Auto Strategic Investment, CSC Financial Capital, and CSC Financial Investment, with participation from Zhejiang Cultural Internet and Yuanjia Fund. Existing backers, including Caitong Capital, Xiaomi Strategic Investment, and CETC Fund, also doubled down.

Image source: Xynova

Xynova argues that the focus in the next phase of embodied intelligence is shifting from how fast or stable a robot moves to how much it can actually do—and the value it generates. The dexterous hand, which dictates whether robots can successfully enter factories and homes, is now the critical factor determining that value ceiling.

Replicating a human hand—refined over millions of years of evolution—is a formidable systems engineering challenge, the company notes. It requires striking an extreme balance between performance, cost, and reliability, while overcoming hurdles like power loss, thermal management, and mass production.

Proceeds from this round will be channeled directly into this core battleground:

1. Building a high-reliability, general-purpose dexterous execution platform

Building on the integrated arm-hand advantages of its Flex 1, Xynova has introduced the Flex 2 dexterous hand, featuring a hybrid "cable-driven plus direct-drive" system. The product delivers high performance without sacrificing reliability or cost efficiency, offering a stable, high-performance platform for embodied intelligence operations.

2. Solidifying mass production and delivery capabilities

Dexterous hands account for nearly 50% of the engineering effort and 30% to 40% of the cost of a humanoid robot. Xynova has added a 5,400-square-meter mass production line to its existing facilities. Inside the factory test workshop, Flex 2 sub-components are undergoing relentless high-intensity testing—over 2 million open-close cycles with an MTBF of at least 5,000 hours. Batch deliveries of dexterous hands and miniature electric cylinders have already begun for top-tier industry clients. The company plans to use the new capital to further expand capacity and meet surging market demand.

3. Building a full-stack closed loop of "hardware + algorithms + data"

The bottleneck for scaling real-world applications lies in the synergy between hardware, computing power, and model algorithms. Leveraging its full-stack in-house R&D and production capabilities, Xynova aims to integrate human-like cerebellar algorithms with its high-degree-of-freedom hybrid dexterous hands. By embedding "data probes" into daily production and living scenarios, the company will use hardware to drive high-quality data collection and simulation training—continuously enhancing the performance of humanoid robots in generalized work environments.