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Attention is now shifting to how Chinese EV makers will fare next year, with domestic demand expected to soften as government policy support wanes. Earnings may suffer further with costs seen rising and discounts for consumers likely to continue.
“We expect the demand environment in 1Q 2026 to be challenging, particularly after nearly two years of national trade-in and scrappage policies” that boosted EV purchases, said Bing Yuan, a fund manager at Edmond de Rothschild Asset Management. Competition could intensify, hurting margins into next year, she added.
Traders quickly turned against the best‑performing stocks as results fell short. Xpeng shares dropped 10 per cent in Hong Kong the day after it reported continued losses and issued weak guidance. Zhejiang Leapmotor Technology touched its lowest level since April after its profit came in at less than 65 per cent of the analyst estimate even as sales nearly doubled.
Analysts had projected a bump in deliveries towards the end of this year, given that taxes on EV purchases will be phasing back in from 2026 following years of exemptions. Things are only likely to worsen next year, with Bloomberg Intelligence estimating China’s EV growth will slow to 13 per cent from 27 per cent this year.
