China‘s electric vehicle market continues to surge with impressive momentum, as leading manufacturers reported substantial February delivery figures over the weekend. BYD and XPeng demonstrated particularly strong performance, with several players showing triple-digit year-over-year growth amid an increasingly competitive landscape.

BYD Dominates with Record-Breaking Sales Performance

BYD, Tesla‘s most formidable global competitor, delivered 322,846 electric vehicles in February, representing a 7.4% increase compared to January and a staggering 164% jump year-over-year. The company’s international expansion has gained significant traction, with overseas sales reaching 67,025 units—a record high for the third consecutive month. This represents a 1% increase from January and an impressive 187.8% surge compared to February 2023.

The Shenzhen-based manufacturer continues to diversify its product lineup, selling both battery electric vehicles (BEVs) and plug-in hybrids (PHEVs). However, its pure electric offerings showed a slight decline, with BEV sales reaching 124,902 units in February, down marginally from January’s 125,377 deliveries. Despite this minor setback, BYD maintained its position as the world’s largest BEV manufacturer in Q4 2024, outpacing Tesla—though industry analysts suggest Tesla could reclaim the top spot in Q1 2025 due to seasonal weakness in the Chinese market.

BYD’s competitive advantage extends beyond sheer volume. On February 10, the company announced the rollout of advanced driver-assist systems across its entire lineup, including the sub-$10,000 Seagull model, with no additional charge. This aggressive strategy places immense pressure on rivals, many of which remain unprofitable and may struggle to match this offering. According to Deutsche Bank estimates, BYD’s domestic orders significantly exceeded deliveries, indicating robust demand for models equipped with the company’s “God’s Eye” driver-assist technology.

XPeng Experiences Meteoric Rise with Budget-Friendly Models

XPeng delivered 30,453 vehicles in February, representing a slight increase from January’s 30,350 units but an extraordinary 570% growth compared to the same period last year. The startup has found tremendous success with its affordable Mona M03 sedan under its lower-cost Mona sub-brand, which has maintained sales above 15,000 units for three consecutive months. The company’s P7+ sedan has also demonstrated strong market performance.

Currently focused solely on BEVs, XPeng plans to introduce extended-range electric vehicles (EREVs)—a type of plug-in hybrid—later this year, potentially broadening its market appeal. The company’s stock reflects this positive momentum, having jumped 16.8% last week to $21.49, reaching a 17-month high. XPEV shares surged 41.2% in February and have gained 81.8% year-to-date.

Li Auto Maintains Profitability with Hybrid-Focused Strategy

Li Auto reported February deliveries of 26,263 vehicles, representing a 12.2% decrease from January but a 9.3% increase year-over-year. The company primarily focuses on EREV SUVs, though it also produces the all-electric Mega minivan and has plans to launch several pure electric SUV models.

The Beijing-based manufacturer has maintained profitability amid intense competition—a notable achievement in China’s crowded EV landscape. Li Auto stock surged 11.9% last week to $30.73, briefly clearing a technical buy point of $31.04 before retreating. LI shares gained 31.2% in February and have increased 28.1% in 2025.

Xiaomi Challenges Tesla with SU7 Success

While Xiaomi doesn’t release specific sales figures, the technology giant reported selling over 20,000 SU7 sedans for the fifth consecutive month, now outselling the Tesla Model 3 in China. On Sunday, March 2, the company began deliveries of its enhanced SU7 Ultra model, priced at 529,900 yuan (approximately $72,750). Xiaomi has secured over 19,000 orders since opening reservations last week.

The smartphone maker turned EV manufacturer plans to expand its vehicle lineup this summer with the YU7, a crossover designed to compete directly with Tesla’s Model Y. Unlike some competitors, Xiaomi is committed exclusively to BEV technology. The company’s stock increased 0.8% last week to $33.54 after setting a record of $36.21 on Wednesday. Xiaomi’s U.S. shares have gained 36.5% in February and 51% year-to-date.

Nio and Zeekr Show Mixed Results

Nio delivered 13,192 vehicles in February, down 4.8% from January but up 62.2% year-over-year. The company offers a diverse range of mainstream-to-premium SUVs and sedans, all powered by battery electric technology. Its Onvo L60 crossover, the first model from its more affordable Onvo brand, competes directly with the Tesla Model Y. While Nio’s flagship brand sales rose 15% from January, Onvo sales fell by 31.5%.

Zeekr, a Geely subsidiary, reported 31,277 EV deliveries in February, representing a 25.6% decline from January but a 51% increase year-over-year. This marks the first delivery report that includes figures from the recently integrated Lynk brand, both units of the automotive conglomerate Geely.

Market Implications and Future Outlook

China’s electric vehicle market continues to exhibit remarkable vitality despite broader economic challenges, with most major manufacturers showing substantial year-over-year growth. This expansion occurs as Tesla begins Model Y deliveries in China, having launched them on February 28, and rolls out enhanced Autopilot features to compete with increasingly sophisticated local alternatives.

The competitive landscape is evolving rapidly, with manufacturers adopting varied technological approaches. While BYD maintains significant volume with a mixed BEV and PHEV strategy, pure EV players like XPeng are showing the most dramatic growth rates. Meanwhile, EREV technology, essentially a form of plug-in hybrid, continues to gain traction with companies like Li Auto.

For Tesla, maintaining relevance in the Chinese market presents growing challenges as local manufacturers increasingly match or exceed its technological capabilities while offering competitive pricing. The U.S. automaker’s stock reflects these pressures, having plunged 13.3% last week for its sixth consecutive weekly decline. TSLA shares have fallen 27.6% for the month and 27.45% year-to-date.

EVXL’s Take

The explosive growth in China’s EV market demonstrates the country‘s commitment to transportation electrification and highlights the increasing global competitiveness of its manufacturers. BYD’s overseas expansion, with nearly 188% year-over-year growth, signals potential challenges for traditional automakers in international markets. Meanwhile, the strategic inclusion of advanced driver-assist systems as standard features—even in budget models like BYD’s sub-$10,000 Seagull—could accelerate industry-wide adoption of these technologies while placing tremendous pressure on less financially secure competitors.

As Chinese manufacturers continue to refine their products and expand globally, established Western automakers may find themselves increasingly squeezed between Tesla at the premium end and aggressive Chinese brands across all market segments. This dynamic bears close monitoring as it could fundamentally reshape the global automotive landscape in the coming years.