I'm in love with my car

Gotta feel for my automobile

Get a grip on my boy racer rollbar

Such a thrill when your radials squeal

– Queen

After attending the Auto China 2024 exhibition in Beijing, this writer declared that "industrial blood-sport had returned – this time in a far larger arena and with much more at stake. China is repeating the Japanese motorcycle wars, except it's with cars. It will be bloody and it will revolutionize what a car can be" (see here).

The 2024 Beijing auto show was held at the 106,800 m2 China International Exhibition Center Sunyi Venue. The 2026 Beijing auto show is being held at the China International Exhibition Center Sunyi Venue as well as the newly constructed 210,000 m2 Capital International Exhibition and Convention Center right next door.

Already too much to absorb in a single day in 2024, this year's extravaganza occupies three times the floor space. 1,451 vehicles are on display, up from approximately 1,000 two years ago. 181 new vehicles were launched, up from 117 in 2024.

The kill-or-be-killed Battle Royale that is China's auto industry has only intensified. The government is phasing out EV (electric vehicle) purchase tax exemptions with a 50% reduction for 2026 and complete elimination in 2027. While this has caused domestic car sales to fall 20.3% in the first quarter of 2026, exports have grown 57%, largely making up the shortfall.

There are myriad plotlines in the bloody drama that is the world's largest auto industry. We can only pull on a few threads in this piece. Competition in China's car market has only become more savage with technology and price wars the principle murder weapons. The battlefield is fluid. Yesterday's winners can be surpassed and today's losers are a model launch away from resurrection.

In the past two years, industry leader BYD stumbled due to uninspired products and regulators coming to the rescue of long-suffering suppliers. While possessing the most vertically integrated supply chain and the most diversified product line, BYD's cars were outshone in premium segments by offerings from NIO, Xiaomi, XPeng and Huawei and outcompeted by Geely, Chery, Changan and Leapmotor in mass-market price wars.

Regulators put an end to BYD's questionable financing practices by demanding that suppliers be paid in 60 days (from an abusive 140-180 days), reducing working capital and hobbling the company's breakneck expansion.

It would, of course, be a mistake to count out BYD, whose long-term strategic investments should start paying dividends. The company invested in its export infrastructure years ago with eight company-owned roll-on-roll-off (RoRo) car transport ships and seven more under construction.