January 1, 2026, 15:07 ET
- China revised 2026 trade-in incentives in a move analysts said could reduce support for lower-priced EVs.
- BYD reported its weakest annual sales growth in five years and set a 2026 overseas sales target.
- Nio and XPeng posted record 2025 deliveries, giving investors fresh data points for the year ahead.
China has tightened its 2026 “cash-for-clunkers” trade-in subsidies for “new energy vehicles” — a policy term for electric cars and hybrids — by linking the maximum rebate to higher-priced models, according to a Commerce Ministry document. “The revised 2026 vehicle trade-in subsidy programmes will reduce support for mid-to-low-priced vehicles under 150,000 yuan,” Deutsche Bank analyst Bin Wang wrote in a note. The Star
The change lands as EV makers start publishing December sales and delivery figures, the first hard data investors get after a year of discounts and uneven demand.
For EV stocks, incentives matter because they directly affect showroom prices. That can swing volumes quickly, and investors have been treating monthly deliveries as a read-through for revenue momentum and price pressure.
The focus is sharpest on China, the world’s biggest EV market and the industry’s main profit battleground, where a long price war has kept margins thin even for large manufacturers.
BYD reported its weakest annual sales growth in five years, with 2025 sales up 7.73% to 4.6 million vehicles, while December sales fell 18.3% from a year earlier, a filing showed. Overseas sales rose 150.7% to 1,046,083 vehicles in 2025, and BYD has aimed to sell up to 1.6 million cars outside China in 2026. With EV sales up 27.9% to 2.26 million last year, BYD is poised to outsell Tesla in annual EV sales; Tesla was expected to deliver 1.64 million vehicles in 2025, down 8.3%, based on a company-compiled consensus.
For investors, BYD’s numbers underline a central 2026 debate: whether bigger players can protect earnings while defending market share against cheaper rivals.
Executives and analysts have pointed to technology and cost as key levers, but the past year showed how quickly price cuts can ripple through the sector and hit valuations.
That helps explain why exports are moving to the center of the 2026 EV stock story. Overseas growth offers a path to volumes when the home market slows, even as companies navigate tariffs, local rules and the cost of building distribution and service networks.
Chinese U.S.-listed peers also posted strong year-end delivery updates. Nio said it delivered 48,135 vehicles in December and 326,028 in 2025, up 46.9% year on year, while XPeng reported 429,445 deliveries for 2025, up 126%.
XPeng also said overseas deliveries reached 45,008 vehicles in 2025, up 96%, as it expanded to 60 countries and regions.
Even with rising deliveries, investors have been looking for evidence that volume growth is translating into better cash generation, not just higher output at lower prices.
In 2026, traders say the biggest swing factors for EV stocks will be policy fine print, how quickly discounting eases, and whether overseas expansion can lift earnings without adding too much cost.
The early signals point to a year where EV shares may react less to headline growth and more to pricing discipline, margins and the ability to fund product and software development without repeated capital raises.
