Auto Industry Profit Margin Drops to 4.1% in 2025 as NEV Penetration Hits 48%

In 2025, China's automotive industry achieved a production volume of 34.78 million vehicles, up 10% year-on-year. Total industry revenue reached RMB 11.18 trillion, an increase of 7.1% year-on-year, but profits amounted to only RMB 461 billion, rising marginally by 0.6% compared to the previous year. The overall profit margin stood at 4.1%, significantly lower than the average of 5.9% for downstream industrial enterprises. Among these figures, new energy vehicle (NEV) production reached 16.52 million units, surging 25% year-on-year, with NEV penetration climbing to 48%. In contrast, internal combustion engine (ICE) vehicle output declined by 1% year-on-year. Revenue per vehicle across the industry chain averaged RMB 321,000, down RMB 16,000 from the previous year, while gross profit per vehicle was merely RMB 13,000. Although local governments have actively promoted the "Two New" policies to stimulate domestic demand, the automotive sector’s profitability has lagged behind other consumer goods industries, and leading automakers continue to face mounting earnings pressure. Industry expert Cui Dongshu noted that as the government advances its anti-"involution" policies, industry profits are expected to gradually recover.