"Self-owned No. 1" changes ownership?

In the first month of 2026, the entire automotive industry felt a tense atmosphere of anticipation. As of February 4th, most car manufacturers experienced a month-on-month decline in sales, with only a few brands showing growth against the trend.

Recently, Geely Auto reported its January sales figures, achieving 270,200 units. In contrast, BYD's January sales were around 210,000 units. From the sales data released by car manufacturers so far, Geely Auto has thus surpassed BYD in January, claiming the title of "self-owned leader" for the month.

The specific sales changes of these two companies also reveal that fuel vehicles have become an important factor for Geely's ability to rebound in January. This serves as a metaphor that the explosive period, which relied solely on the single power advantage to win effortlessly, is rapidly fading away. An era that emphasizes systemic strength, integration efficiency, and global multi-track capabilities seems to be making a strong comeback.

Behind the change in rankings is the Chinese automotive market entering an extremely subtle and brutal turning point after five years of frantic electrification. As Morgan Stanley pointed out in its latest industry research report, 2026 is the year when growth inertia fails, and with the halving of the vehicle purchase tax incentives and the decline of local subsidies, the competition between new energy and fuel vehicles is officially being brought back to a more realistic starting line.

The change of the "self-owned leader" is just the prologue to this dramatic and unpredictable play. In this chess game, no one can sit on the throne forever.

The Tide of Benefits Recedes

Geely Auto's return to the throne of "self-owned leader" in January 2026 is mainly due to its "dual-leg strategy," which provides it with greater flexibility to respond to the current market environment.

Geely Auto's sales of 270,200 units achieved a 1% year-on-year growth and a 14% month-on-month expansion against the trend.

From the sales structure, in January, Geely's China Star series sold 134,448 units, with a month-on-month growth of 86%; the China Star high-end series saw an even more explosive month-on-month increase of 160%.

In terms of new energy, Geely Auto achieved 124,252 units in January, maintaining a 3% year-on-year growth, while the internal structure has quietly undergone a qualitative change. The ZEEKR brand sold 23,852 units, with a year-on-year growth rate nearly doubling (99.7%). In the mainstream market, supported by popular models like the Galaxy and the Starship 7EM-i, Geely's sales reached 82,990 units.

Geely Auto's CEO and Executive Director Guo Shengyue stated, "The halving of the vehicle purchase tax policy is beneficial for Geely." He analyzed that Geely's high proportion of fuel vehicles makes the first quarter of 2026 favorable for Geely's fuel vehicle segment.

From the overall situation of the Chinese automotive market in January 2026, the impact of the halved vehicle purchase tax subsidy is significant.

According to preliminary statistics from the Passenger Car Association, retail sales in the domestic passenger car market are expected to be 1.8 million units in January, with a month-on-month decline of nearly 37%. The data clearly outlines the path of consumer return: in January, the retail penetration rate of domestic new energy vehicles plummeted from nearly 60% in December 2025 to around 44.4%, and at one point in early January, it even dropped to a freezing point of 35.5%. Compared to the rapid growth of new energy vehicles over the past two years, where penetration rates often exceeded 50%, the January data undoubtedly sounded an alarm for the market Li Yanwei, an expert member of the Expert Committee of the China Automobile Circulation Association, pointed out that "the poor sales of new energy vehicles in January are mainly due to changes in subsidy policies."

The nearly 15 percentage point drop in penetration rate is a result of demand changing under the dual pressure of policy and physical environment in the short term.

The substantial driving force behind this regression is the 5% "purchase tax threshold." Starting from January 1, the purchase tax for new energy vehicles has changed from being fully exempt to being halved, with the maximum tax exemption per vehicle reduced to 15,000 yuan. For a mainstream pure electric model priced around 200,000 yuan, consumers need to pay nearly 10,000 yuan in additional tax costs. Against the backdrop of a price war that has squeezed terminal discounts, this 5% explicit expenditure has dulled the purchase cost-performance ratio of new energy models compared to fuel vehicles.

Several car sales representatives told Wall Street Insight that in January, consumers were more hesitant when purchasing cars, and the purchase cycle has noticeably lengthened. "The inconsistency in policy rhythm makes it difficult for buyers to judge whether now is the right time to buy."

Additionally, January, as a key vehicle usage window before the Spring Festival, has seen consumers' reliability requirements for long-distance interprovincial travel and low-temperature environments peak. With structural deficiencies still existing in charging infrastructure, the originally cautious new energy audience, under the dual game of rising purchase tax and winter range discounts, quickly shifted towards the efficient fuel and PHEV camp that "requires both electric feel and mileage while saving on taxes."

Gong Min, head of UBS's China automotive industry research, told Wall Street Insight that at the beginning of this year, the domestic market indeed faced multiple challenges, including the first imposition of a 5% purchase tax on new energy vehicles, the decline of replacement subsidies, and rising raw material prices. Looking at the whole year, terminal sales are under pressure.

Turning Point

Geely's rise to the top in January is just the tip of the iceberg of market changes.

As the old-for-new subsidy tightens and the cost of purchasing new energy vehicles normalizes upwards, the market is shifting from being driven by novelty to being driven by value.

When the maximum tax exemption per vehicle is compressed, the logic of maintaining thin profits through policy patches and attempting to smooth out premiums through subsidies collapses completely. This policy lever brings fuel vehicles, hybrid vehicles, and new energy vehicles back to a nearly equal starting line. The previous dimension-reducing strikes achieved through policy dividends have come to an end.

Now, new energy vehicles must compete head-to-head with hybrid and highly efficient fuel vehicles without any protective charms. This means that the competitive focus of car companies must return from storytelling to improving efficiency.

Regarding whether fuel vehicles will continue to maintain their strength, Cui Dongshu, secretary-general of the Passenger Car Association, responded to Wall Street Insight, saying, "No." In Cui Dongshu's view, looking at the performance of the new energy passenger vehicle exemption list from 2024-25 entering 2026, many new energy passenger vehicles did not make it onto the list, which will force companies to accelerate new product research and iteration, resulting in a "low first half and high second half" trend in the passenger car market throughout the year.

Li Yanwei pointed out that the current pressure on new energy vehicle sales will continue for several months.

This also means that in the coming months, fuel vehicles and new energy vehicles will be in a state of tension. In the landscape of 2026, the incremental growth has nearly disappeared, and every new car transaction essentially involves tearing away market share from competitors Gong Min predicts that the growth of domestic new energy vehicles this year will be around 8%, a significant slowdown compared to last year's approximately 30%.

In addition, simply lowering prices can no longer drive scale growth. Car manufacturers must squeeze profits from every penny in the supply chain. Those who can reduce internal friction through organizational reform, like Geely and GAC, will be the ones to survive in the prolonged winter lasting several years.

Industry experts generally believe that 2026 will be the "coming-of-age ceremony" for Chinese automotive companies. The industry is shifting from chaotic, scattered battles to a centralized, highly systematic, and ecological confrontation led by giants.

The changes behind the "self-owned first brother" reveal the most authentic side of the Chinese car market: in this battlefield where the law of the jungle prevails, no one can rely on past achievements to rest on their laurels forever.

For Geely, returning to the throne in January is not the end, but the starting point for accepting more rigorous scrutiny. For the entire industry, the turning point has arrived; those still clinging to policy dividends and organizational rigidity will be quickly erased in this decisive battle.

This grand game has just entered its most perilous mid-game. No one can sit on the throne forever; only those who continuously step out of their comfort zones and achieve efficiency evolution on the real battlefield are qualified to remain at the table