China EV Stocks Tumble: XPeng, Li Auto, BYD and Polestar Hit as Price War Bites

Key takeaways

• China’s EV stocks are under pressure from a price war, weaker domestic sales, and shrinking incentives, leading to steep declines in share prices.
• XPeng closed at $9.05 last week
• Li Auto fell to $11 from $47.28 all‑time high
• Polestar down 80% YTD to $4.10

What happened

China electric‑vehicle shares fell sharply this year, with XPeng, Li Auto, Polestar, Nio and BYD all losing billions in market value as a price war drags on. XPeng closed last week at $9.05, its lowest since September 2024; Li Auto slid to $11 from an all‑time high of $47.28; Polestar is down 80% year‑to‑date at $4.10; Nio fell to $3.20, 54% from its peak; BYD has dropped 40% from its peak.

Why it matters

The sell‑off reflects a broader slowdown in Chinese EV sales, with passenger vehicle sales projected at 18.5 million this year—much lower than last year—and a shift in government incentives that cut the full purchase tax exemption from RMB 30,000 to RMB 15,000. Rising supply, falling demand and higher costs from…

Short-term and longer-term

Short-term. Over the next few days, watch for any earnings

Longer-term. Over the coming months, the focus will shift to whether these companies can sustain international growth amid potential tariff hikes in Europe and the U.S.