中国汽车：5月零售量同比增长9.9%，电动汽车销售渗透率为51.4%；又一个强劲的月份，但价格战影响投资者情绪

Chinese Autos: May retail vol. +9.9% yoy, EV sales penetration51.4%; Another strong month, yet price wars weigh on investorsentiment May 2025 China retail volume +9.9% YoY.We track data on mandatory first-time autoinsurance volumes in China, which we believe gives the most accurate read on retail sell-through. May volume recorded 1.89mn units, up +9.9% YoY. The strong momentum reflectsresilient demand, fueled by new product launches and upgrades, aggressive promotionsand extended subsidies, as well as improved consumer sentiment stemming from morefavorable headlines on geopolitical environment. However, the conclusion of subsidies bysome provincial governments for the 1H of the year may temporarily impact auto sales inJune, until these programs are reinstated. Eunice Lee, CFA+852 2123 2606eunice.lee@bernsteinsg.com Frankie Fong+852 2123 2637frankie.fong@bernsteinsg.com Mika Fu+852 2166 4805mika.fu@bernsteinsg.com Retail SAAR 24.0mn units.Retail SAAR for May 2025 came in at 24.0mn units, highervs. 23.8mn units in April 2025 and our full year forecast of c.22mn units for Chinese autosdemand. Notably, AITO M8, Nissan Sylphy, Qiyuan Q07, Galaxy Xingyao 8, and Tesla ModelY contributed to May’s strength. Traditional premium brand sales extended decline of -12.7 YoY, including -13.3%YoY for locally-built premium vehicles. Mass market brand sales rose +14.9% YoY in May.Overall premium penetration recorded 14.5% in May, significantly lower vs. 18.3% in theprior year. Traditional premium brands who are still behind on electrification transition havecontinued to lose market share. In May 2025, Porsche’s registrations fell -19.2% vs. 2024,and -52.1% vs. 2023. Similarly, retail registrations for Mercedes declined by -21% YoY,BMW -12%, and Audi -10% in May 2025. Overall EV (BEV & PHEV) penetration arrived at 51.4% in May 2025,of which BEVarrived at 30.9% and PHEV at 20.5%. Overall EV sales (BEV & PHEV) were up +23.4%YoY and reached 973k units in May. BEV sales was up +20% YoY and PHEV grew +29%.BYD Group (incl. BYD, Denza, Fangchengbao, and Yangwang) continued to top EV sales thismonth with 282k units and 29.0% overall share, followed by Geely (incl. Galaxy, Geometry,Zeekr, and Lynk&Co) with 114k units and 11.8% share. Li Auto registered 45k units (4.6%share), Tesla 39k (4.0%), AITO 36k (3.7%), Leapmotor 32k (3.3%), Xiaomi 29k (3.2%),XPeng sold 27k (2.8%), NIO (incl. ONVO and Firefly) sold 25k (2.6%). Elevated inventory levels, alongside heightened price competition, dampeninvestors’ sentiment in the sector.Cumulative EV channel inventory over LTM reached686k units in May, vs. 592k units in April. We updated BYD’s model and target pricesto reflect our latest view on the companyand to account for the adjusted share count following the recent issuance of H-share stockdividend. A-share dividend is expected to be issued in July.We maintain our Outperformrating for BYD with price targets for 1211.HK lowered to HK$145.00(Old: HK$460,or HK$153 if adjusted for stock dividend)and for 002594.CH to RMB 390.00(Old:RMB420.00)based on lower volume & earnings assumptions. We value BYD based onSOTP, which correlates to 18x 1-year forward P/E. For the exclusive use of JATIN CHAWLA at TVF CAPITAL ADVISORS PTE LTD on 16-Jun-2025 BERNSTEIN TICKER TABLE INVESTMENT IMPLICATIONS We hold a cautiously optimistic view of the sector. China’s auto sales in 1H 2025 have trended above expectations, whichwas boosted by the revamped trade-in policy and local government subsidies, accelerated new product launches, andincreased OEM promotions. Policy support could help sustain stronger demand through the rest of 2025, though year-on-yearcomparisons will become more difficult from late Q3. We also expect exports will continue to be a growth driver, albeit at a moremoderate growth rate than previous years. We forecast industry wholesale volumes to grow by 1% and reach c.27.5mn units in2025, comprising c.22mn units (flat yoy) for the domestic market and c.5.5mn units (+10% yoy) for exports. The long term secular growth outlook for EVs remains intact and even though EV transition has come to the mass adoptionphase in China, we forecast EV sales growth will be c.25% for 2025 and drive EV penetration to 60%. Nearer term, we alsoexpect PHEV growth to outpace the market. We expect competition within the domestic market to remain intense and putpressure on pricing and profitability. Meanwhile, we believe overseas markets will present a strategic growth opportunity. Forour EV names, we rateBYD, Xiaomi, and Li Auto Outperform, andXPeng and NIO Market-Perform. Within our traditionalChinese OEMs coverage, we rateGeely OutperformandGreat Wall, GAC, and SAIC Market-Perform. Recent research highlights: 15 Jun 2025 - Global Autos: China EV adoption, truck cycle, Japan restructuring, and the E-208 GTi (ICYMI week 24)9 Jun 2025 - Electric Revolution: Divergence — China's path to leading EV adoption, blueprint for global electrification efforts9 Jun 2025 - G