From January to November 2025, the Chinese automotive industry’s profit margin was only 4.4%, the second lowest in history, only 0.1% higher than the lowest 4.3% recorded in 2024, according to data released by Cui Dongshu, Secretary-General of the China Passenger Car Association (CPCA). The average revenue per vehicle in the industry chain was 322,000 yuan (45,800 USD), but the gross profit per vehicle was only 14,000 yuan (2,000 USD).
| Year | Profit Margin |
| 2017 | 7.8% |
| 2018 | 7.3% |
| 2019 | 6.3% |
| 2020 | 6.2% |
| 2021 | 6.1% |
| 2022 | 5.7% |
| 2023 | 5.0% |
| 2024 | 4.3% |
| 2025 | |
| January to February | 4.2% |
| March | 3.5% |
| April | 4.4% |
| May | 5.2% |
| June | 6.9% |
| July | 3.5% |
| August | 3.4% |
| September | 4.4% |
| October | 3.9% |
| November | 4.4% |
| 2025 Cumulative | 4.4% |
This performance can be characterized by “scale growth but pressure on profits” despite the industry’s revenue exceeded 10 trillion yuan (1.42 trillion USD), a year-on-year increase of 8.1%; but the costs were 8.84 trillion yuan (1.26 trillion USD), an increase of 9%; and profits were 440.3 billion yuan (62.6 billion USD), a year-on-year increase of 7.5%.
Behind the sluggish profits are the dual pressures of costs and competition. On the one hand, the industry’s cost growth rate of 9% exceeded the revenue growth rate of 8.1%, with factors such as fluctuating battery raw material prices and rising labor costs continuing to exert pressure.
On the other hand, the “internal competition” between new energy vehicles and traditional gasoline-powered vehicles has intensified, with price wars spreading from the new energy vehicle sector to the gasoline-powered vehicle market, further eroding profits.
For example, this pressure is reflected in Great Wall Motor’s (GWM) financial reports. In the first three quarters, GWM’s revenue increased by nearly 8%, but net profit dropped by nearly 17% due to increased investment in distribution channels and fierce price competition.
Now, more than half of the dealers are losing money, and over 70% of the car models are being sold at a loss, according to Chinese news outlet Autohome.
In November alone, the industry’s revenue was 1,144.5 billion yuan (163.3 billion USD), a year-on-year increase of 9.7%; costs were 1,016.2 billion yuan (145 billion USD), an increase of 11.4%; and profits were 50.8 billion yuan (7.2 billion USD), a year-on-year increase of 39.2%. The automotive industry’s profit margin in November was 4.4%, an improvement compared to 3.9% in October this year and a substantial increase from 3.3% in November of the previous year.
From January to November 2025, 31.09 million vehicles were produced, a year-on-year increase of 11%. 14.53 million new energy vehicles were produced, a year-on-year increase of 27%, with a penetration rate of 47%. 16.57 million gasoline-powered vehicles were produced, remaining unchanged year-on-year.
Source: CPCA, Autohome, Xiaomi
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