Will domestic new energy vehicles be the next photovoltaic industry?

Recently, Wei Jianjun, chairman of Great Wall Motors, has sparked heated discussions. He bluntly stated that the automotive industry has seen “Evergrande-style” risks, criticized price wars, high-leverage expansion and other chaos, and named the business models of new car companies such as Weilai. At the same time, BYD has started a new round of price wars, Hong Kong stocks have continued to fall, and the industry’s internal circulation has intensified. This reminds people of the photovoltaic industry ten years ago – it also experienced explosive growth, price wars, overcapacity and international trade frictions. Will domestic new energy vehicles be the next photovoltaic industry?

Similar scripts: the shadow of price wars and capacity expansion
The lessons of the photovoltaic industry are vivid. In the early 2010s, Chinese photovoltaic companies expanded production crazily under policy stimulus, resulting in global overcapacity, prices plummeted by more than 70%, and giants such as Suntech and Yingli went bankrupt one after another. Today, new energy vehicles are also facing a similar dilemma: the overall profit margin of the industry in 2024 is only 4.3%, and some car companies have fallen below 3%. The “618 promotion” launched by BYD on May 23 has once again set off a price war, with 22 models reduced by up to 100,000 yuan, which directly impacted market confidence.
The essence of this price war is the mismatch between capacity expansion and demand. In 2024, the domestic new energy vehicle capacity utilization rate was 76%, which was higher than the worst period of the photovoltaic industry (it was lower than 50%), but some new forces car companies are still expanding blindly. For example, Weilai’s debt ratio is as high as 87%, and it will lose 22.4 billion yuan in 2023. It loses money on every car sold and relies entirely on capital transfusions. This “Evergrande-style” model is exactly the same as the high-leverage expansion of Suntech and Hanergy in those years. BYD, the industry leader, is becoming a typical epitome of this chaos: in order to catch up with the annual sales target of 5.5 million vehicles (only 1.4 million vehicles were completed from January to April, with a progress of 25.5%), its large-scale price reduction strategy boosted sales in the short term, but exposed the deep contradiction of the “scale first” model – the gross profit margin of the automotive business in 2024 was 17.2%, which is lower than the peak in 2021 (21.3%). This price reduction is expected to further lower the single-quarter gross profit margin to below 15%. What is more worthy of attention is that its overseas market staged a “price dive”, and the 150,000 yuan model dropped to 100,000 yuan in the Southeast Asian market after half a year, confirming the stereotype that “Chinese cars rely on low prices to win the market”, which is exactly the same as the path of the photovoltaic industry to seize the overseas market by relying on low prices.
Fatal differences: technical barriers and market resilience
However, there are essential differences between new energy vehicles and the photovoltaic industry, which may avoid repeating the same mistakes.
First of all, the technical threshold is higher. The photovoltaic industry has a relatively single technical route, and crystalline silicon batteries are highly homogenized, while new energy vehicles are experiencing a technological explosion: all-solid-state batteries are expected to be installed in 2027, and intelligent driving will rapidly iterate from L2 to L4. BYD, Huawei and other companies have built moats through three-electric systems and intelligence. This technological iteration capability enables leading companies to continuously improve their competitiveness, rather than simply relying on scale expansion.
Fatal difference: technical barriers and market resilience However, there are essential differences between new energy vehicles and the photovoltaic industry, which may avoid repeating the same mistakes. First, the technical threshold is higher. The photovoltaic industry has a relatively single technical route, and crystalline silicon batteries are highly homogenized, while new energy vehicles are experiencing a technological explosion: all-solid-state batteries are expected to be installed in 2027, and intelligent driving will rapidly iterate from L2 to L4. BYD, Huawei and other companies have built moats through three-electric systems and intelligence. This technological iteration capability enables leading companies to continuously improve their competitiveness, rather than simply relying on scale expansion.
Finally, the complexity of the industrial chain is different. The photovoltaic industry chain is concentrated in silicon materials, battery cells and other links, while new energy vehicles involve thousands of parts such as batteries, motors, electronic controls, and intelligent networking, and the supply chain coordination requirements are higher. For example, BYD reduces costs through vertical integration, while Great Wall emphasizes “not squeezing suppliers” to maintain the health of the industry chain. This ecological competition model is more sustainable than the simple price war in the photovoltaic industry.
BYD’s stock price is under pressure: the pain of the leader under triple pressure
In the public opinion storm in which Lao Wei bombarded the chaos in the industry, BYD’s recent stock price performance is particularly dazzling-on May 27, Hong Kong stocks fell again by 3.2%, and the cumulative correction from the April high was 18.7%, which reflects three deep contradictions behind it:
（1）Valuation correction after the ebb of A-H stock linkage speculation
As the second largest new energy vehicle company in A-share market value (peak of 1.2 trillion yuan) and a weighted stock of Hong Kong Stock Connect, BYD has benefited deeply from the “special valuation + technology growth” dual concept speculation in the past two years. In 2024, the northbound funds once held 12.3%. However, the current market style switching is triggering a chain reaction:
Funds are loosening their group, and the proportion of active equity funds held in the first quarter fell to 3.7%, halving from the peak in 2023, reflecting the institutions’ concerns about their “increased revenue but not increased profits”;
The liquidity premium of Hong Kong stocks has disappeared. The Hang Seng Technology Index has fallen 5.6% since May, and the net selling amount of Hong Kong Stock Connect has reached HK$4.2 billion. The capital pressure has amplified stock price fluctuations. This “emotional resonance” is exactly the same as the correction caused by the price increase of silicon materials in 2021 by the photovoltaic leader Longi Green Energy Technology Co., Ltd.-when the theme speculation ebbs, the real performance quality is the core of pricing.
（2）Globalization challenges under the EU tariff stick
The European Commission announced a preliminary ruling on May 20, proposing to impose temporary tariffs of 17%-36.3% on BYD and other companies (the final tax rate will be determined in August). Although BYD has partially circumvented tariffs by building a plant in Hungary (with an annual production capacity of 150,000 vehicles and put into production at the end of 2025), its 120,000 vehicles directly exported to the EU in 2024 (accounting for 38% of European sales) still face an immediate impact. What’s more difficult is that Lao Wei publicly criticized the “hidden door handles are unsafe” and “technical parameters are boasting”, which is consistent with the European market’s stereotype that Chinese automakers “focus on marketing and neglect safety”, which may cause local dealers to postpone orders and further affect Q3 shipments in 2024. 3. The inevitable test from “scale king” to “value reconstruction” BYD’s dilemma is essentially a concentrated epitome of the extensive growth of new energy vehicles in the “first half” – relying on policy dividends and scale expansion, but accumulating shortcomings in brand premium, technical barriers, and global compliance. Compared with Great Wall’s technical determination of “never doing range extension” and Weilai’s differentiated route of “battery replacement + service”, BYD urgently needs to shift from “price for volume” to “value competition”. After all, what the capital market ultimately pays for is not the sales growth rate, but the profitability that can cross the cycle.
Breakthrough key: technological innovation and globalization game
To avoid becoming the next photovoltaic, new energy vehicles need to break through in two major battlefields:
（1）Differentiation of technical routes and ecological construction The current industry presents a “dual track” pattern: pure electric models benefit from battery technology breakthroughs (such as CATL condensed matter batteries) and the improvement of supercharging networks, while plug-in hybrid/range extensions seize the market with cost advantages. This differentiation of technical routes reduces the risk of a single track. For example, Ideal Auto avoids the pure electric red ocean through extended range technology, and its sales in 2024 increased by 29.7% year-on-year; BYD DM-i technology promotes plug-in hybrid models to become the main force in the 100,000-200,000 yuan market. In the future, breakthroughs in hydrogen fuel hybrids in the commercial vehicle field and V2G grid interaction in the pure electric field will further expand the boundaries of technology.
（2）Response to global competition and trade barriers The EU’s imposition of tariffs on Chinese new energy vehicles seems to copy the “double anti-dumping” routine of photovoltaics, but the response strategy of Chinese automakers is more flexible: BYD reduced the tax rate to 17% through price commitment negotiations, SAIC and Geely accelerated local production in Europe, and Weilai and Xiaopeng turned to emerging markets such as Southeast Asia and the Middle East, with exports to Indonesia increasing by 345% in 2025. This combination of “policy game + market diversification” is more resilient than the photovoltaic industry’s simple reliance on price wars.
Industry end: reshuffle is inevitable, but the winner will rewrite the rules
The lessons of the photovoltaic industry have proved that capacity expansion without technical barriers will eventually be eliminated by the market. Although new energy vehicles are facing price wars and international frictions, leading companies have demonstrated differentiated competitiveness: BYD has occupied 6% of the global market share with the advantages of the entire industrial chain, Geely has achieved a 21% sales growth through a global layout, and cross-border players such as Huawei and Xiaomi are reshaping the industry landscape with intelligence.
In the next 3-5 years, the industry will experience a brutal reshuffle. New forces with high debt and low technology may follow in the footsteps of Weilai, while companies with technological accumulation and globalization capabilities will stand out. Just as the photovoltaic industry eventually recovered through technological iteration (such as PERC batteries) and market adjustments, new energy vehicles will also give birth to true global giants in the wave of intelligence and electrification.
Will domestic new energy vehicles be the next photovoltaic industry? New energy vehicles will not simply copy the tragedy of the photovoltaic industry, but the challenges are still severe. Price wars are short-term pains, and technological innovation and globalization are the long-term antidotes. When car companies shift from “volume price” to “volume technology”, and when the market shifts from policy-driven to demand-driven, China’s new energy vehicles may open up a development path different from photovoltaics-not repeating history, but creating history.