Recently, NIO founder and chairman Li Bin made predictions on the current stage and future trends of the Chinese automotive industry, warning once again that the total domestic retail volume for the whole year of 2026 may decrease by 15% to 20% year-on-year, causing widespread market attention.
On June 13, Li Bin made this judgment during a speech at the Chongqing Automotive Forum: “For the whole year, the domestic retail volume, we believe, compared to last year, we should be prepared for the entire industry to decline by 15% to 20%.”
Li Bin stated that the Chinese automotive industry has entered the most brutal stage of the competition starting this year. From January to May this year, the domestic retail market saw a 19.5% year-on-year decline. “During the first quarter, everyone still believed that there were some unfavorable impacts released earlier due to policies from last year. However, after entering April and May, the industry should no longer have such fantasies.”
According to the latest data released by the China Passenger Car Association, the decline in car retail sales is widening. In the first week of June, the national passenger car market retail sales were 228,000 units, a 23% year-on-year decrease and an 11% decrease from the previous month; cumulatively this year, 7.327 million vehicles were sold, a 20% year-on-year decrease.
The day before, Li Bin also mentioned at a media communication meeting that from the perspective of the domestic consumption market, this year is the most difficult year since he entered the automotive industry. He believes that there is still a lot of pressure that has not been transmitted yet, and both dealers and the used car industry are under significant pressure. Although NIO itself is still growing and benefiting from the relative increase in the entire electric vehicle market, there are still many uncertainties in the coming months, and the market faces significant challenges. How to get through this period is a question that every company needs to answer.
At the end of May this year, during the opening ceremony of the “2026 Future Automotive Pioneer Conference,” Li Bin mentioned that the Chinese automotive industry is entering a new stage, presenting four main features: entering the most brutal competition, the accelerating penetration rate of electric vehicles, products entering a mature stage, and turning to system competition.
Li Bin’s repeated warnings to the market have sparked widespread attention on the internet.
Headline article author, Weibo influencer “New Car Tribe,” analyzed in a post: “The growth rate of the automotive market is slowing down, and the price war is escalating, with the dimensions of industry competition already quietly changing. Li Bin of NIO bluntly stated at the Chongqing forum that car companies can no longer rely solely on sales volume to be heroes.”
“The era of simply pursuing sales volume has come to an end. Consistent high-quality profitability is the core strength for companies to endure through cycles. The average selling price of a car determines the brand’s status, profit margins verify product strength and premium pricing capabilities, while cost controls test internal operational capabilities.”
“The market has entered the elimination stage, and the short-term sales frenzy is difficult to sustain. Learning to balance scale with profit, refining brand, technological, and management capabilities, maintaining a long-term operational mindset, is essential for companies to stand firm in intense competition.”
Technology blogger and Weibo influencer “Internet Master Three” stated in a post: “Now that the domestic car ownership has reached 370 million vehicles, the era of high-speed growth in incremental quantity has come to a complete end, and the industry has officially entered a fiercely competitive stock competition phase, where the battle is no longer about individual popular car models but the comprehensive operational strength of an entire system.”
Technology blogger and Weibo influencer “Iron Bull Tech” remarked: “Li Bin is warning the entire industry to prepare for a 15% to 20% decrease in the total annual retail volume. In fact, the decrease has already begun in the first few months of this year, and the decline is quite significant. Now that the new energy race has reached its peak, taking the route of price reduction to boost sales is no longer viable. Moving forward, it will be a competition of three core strengths: capital, technology, and scale. Having sufficient cash flow is essential to withstand the pressure of research and development and losses; developing self-owned battery and autonomous driving core technologies is crucial to differentiate and avoid blindly following trends with configurations; increasing production scale reduces costs and creates profit margins. Small brands lacking funds and technology are at risk of being eliminated, as the industry enters a brutal elimination stage, relying solely on gimmicks and low prices is not sustainable for long-term development.”
Technology blogger and Weibo influencer “Tech Maestro” expressed: “Currently, metal prices are soaring daily, and semiconductor prices are also soaring daily, significantly increasing the production and manufacturing costs of whole vehicles. However, it is difficult to raise car prices, creating great operational pressures for car companies. According to the current market conditions, car companies may accelerate the pace of bankruptcies this year as there are still too many players in the industry.”
It is worth noting that, in addition to Li Bin, many senior executives of car companies issued warnings at this forum.
According to “Red Star News,” Mega Auto CEO Wan Liangyu stated: “Price wars are eroding consumer trust, it is not about finding temporary solutions, it is about creating value. The golden age of ‘making money as long as you produce’ in the automotive industry twenty years ago is long gone. Nowadays, ‘profitability is a blessing’.”
Regarding the rise in chip prices, Sailes Zhang Xinghai provided a comparative set of numbers: “The price of storage chips has risen from 20 yuan per unit to nearly 100 yuan per unit, nearly a five-fold increase; coupled with the sharp rise in lithium carbonate prices, the average cost of a car from a well-known brand has increased by 15,000 to 20,000 yuan per vehicle. The pressure is still significant.”