<div id="readability-page-1">Geely Auto has gained the upper hand in mainland China’s intensifying automotive sector, as its diverse product line-up pays off after electric vehicle (EV) king BYD suffered a setback following partial withdrawal of a tax break. Controlled by Chinese billionaire Li Shufu, Geely overtook BYD in sales during the first two months of the year because of its vehicles’ quality and reliability, even as Beijing intensified efforts to curb price competition among carmakers, according to analysts. “Industry champions attract more [loyalty] and their products are often viewed by consumers as best in class,” said Eric Han, a senior manager at Shanghai consultancy Suolei. “Competition between Geely and BYD this year could redraw the landscape of China’s automotive industry.” Geely, which builds petrol and electric cars under brands including Zeekr, Lynk and Galaxy, delivered 476,327 units in January and February to domestic and overseas buyers, an increase of 1 per cent from a year earlier, data from the carmaker showed. Geely’s sales of electric vehicles (EV) jumped 10.1 per cent year on year to 241,740 units in the same period. The small year-on-year gain was enough to help the carmaker, based in east China’s Zhejiang province, leapfrog Shenzhen-headquartered BYD, whose sales in the first two months of the year plunged 35.8 per cent from a year earlier to 400,241 units.  BYD, meanwhile, ceased producing petrol cars in 2022, choosing to focus exclusively on pure electric, plug-in hybrid and extended-range vehicles. It has been the mainland’s largest carmaker since 2024, buoyed by the surging adoption of EVs in China. Chinese EV makers have been affected by a policy shift this year. Buyers who were exempt from a 10 per cent purchase tax until last year now have to pay a 5 per cent levy, with the incentive set to be phased out by 2028. The sharp fall in BYD’s sales was a clear sign that narrowing government support could have a negative impact on the EV market amid rising worries about a slowing economy and falling incomes, said Tian Maowei, a sales ­manager at Shanghai-based Yiyou Auto Service. “Geely’s tiny sales growth this year is impressive given the pessimism surrounding all the carmakers,” Tian said. “More drivers view Geely’s cars as good value for money as they tighten their purse strings.” In January, Deutsche Bank projected car sales on the mainland would fall 5 per cent this year, while UBS predicted a 2 per cent decline, citing overcapacity and the phasing out of the tax break. Beijing’s harsh stance on “involution” has also cooled buying interest, as major carmakers stopped offering steep discounts to lure customers. Involution refers to fierce competition that drives down prices and undermines sustain­able growth. In some cases, ­manufacturers sell products below cost just to keep rivals at bay. Last month, Jerry Gan Jiayue, head of Geely Auto’s car development and sales, said the carmaker would improve its models’ range and charging times instead of cutting prices to consolidate its lead in China, the world’s largest automotive market. In December, Geely launched a 2 billion yuan (US$290 million) facility for safety tests in Ningbo, an industrial hub in the eastern Zhejiang province. Chairman Li Shufu said during a ceremony to launch the facility that Geely would rely on technological innovations to improve the quality and performance of its cars while exiting the brutal discount wars that had ensnared nearly all players. Geely Auto’s parent, Zhejiang Geely Holding Group, owns Volvo Cars and a stake in Mercedes-Benz maker Daimler. Only a handful of the nearly 50 mainland-based EV builders, such as BYD and Stellantis-backed Leapmotor, have been able to turn a profit amid the price wars. BYD, looking to offset the severe domestic sales decline, planned to increase its exports by 24 per cent this year to 1.3 million vehicles, said Li Yunfei, general manager for branding and public relations, in January. </div>

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<p>Geely Auto has surpassed BYD in sales during the first two months of 2026, becoming China's top carmaker. This shift is attributed to Geely's diverse product lineup and the quality of its vehicles, while BYD faced a significant sales decline due to a partial withdrawal of a tax break. Geely sold 476,327 units, a 1% increase year-on-year, while BYD's sales dropped 35.8% to 400,241 units. Analysts suggest that the competition between these two companies could reshape the automotive landscape in China amid changing government policies and economic concerns.</p>

- Geely Auto has surpassed BYD in sales in early 2026 following BYD's decrease in sales due to a partial withdrawal of a tax break.  
- Geely's vehicle range, including petrol and electric models, achieved a sales increase of 1% with electric vehicle sales rising by 10.1%, while BYD’s sales fell by 35.8%.  
- Analysts note that competition between Geely and BYD could reshape China's automotive landscape as both companies navigate changing government policies and consumer preferences amid a challenging market.

Geely beats BYD sales in first 2 months of 2026 to become China’s top carmaker