China's car industry might laid bare: 2026 Xiaomi YU7 eclipses 400,000 orders beating out upgraded Tesla Model Y as new car sales in China double entire yearly Australian market in one month

The latest sales figures from China show an unprecedented levels of growth, with nearly 2.1 million new cars sold in the world’s second largest economy in the month of June.

The entire Australian new car sales in 2024 was just more than 1.2 million. In the first half of this year, the Chinese market is already at nearly nine million units.

By far the best seller in China in June was the smash-hit Xiaomi YU7 electric SUV. Following on from the brand’s first model, the also extremely popular SU7 sedan, the YU7 sold over 200,000 units in three minutes, and by the end of June the company had reported it had orders for 408,586 units.

Orders exceed production capacity at Xiaomi’s fledgling factory site in Beijing, which reportedly can now produce around 300,000 units a year. Xiaomi's SU7 is also a top five sellers in the Chinese sedan market, recording over 150,000 units in June, suggesting long waits for buyers and nixing hopes of export capacity.

The next most popular SUV in China in June was one of the YU7’s primary rivals, the Model Y, which accounted for 163,437 units. Surprisingly, the Audi Q5L (a domestically-built joint-venture China-only model) accounted for a whopping 146,549 units and was the next most popular SUV after that.

For the first half of 2025, BYD is still the best-selling brand in China. It is up 33.04 per cent, having moved over two million units, closely followed by MG’s parent company SAIC motor, which is up an even more impressive 40.2 per cent year-on-year.

Geely, which just arrived in the Australian market with its affordably-priced EX5 electric SUV, ranks third with more than 1.4 million sales, up 47 per cent year on year.

Changan, which has a presence in Australia via its Deepal electric and hybrid brand, is next in the rankings, moving more than 1.3 million units. Chery ranks next, moving more than 1.2 million units.

China’s market is surging thanks to a new government initiative (which translates to the catchy phrase: “New Energy Vehicle Consumption Season in Thousands of Counties and Towns”) led by the Ministry of Commerce which is issuing subsidies of up to 20,000 RMB (AU$4270) per vehicle in 200 cities and prefectures. In addition, banks are incentivized to reduce or remove penalties for early repayments. 

These add to an existing incentive by the government for trading in older combustion vehicles for newer plug-in hybrid or electric ones, which has been cited as a contributing factor to a round of aggressive cost-cutting measures by BYD and others to try and maximise market share off the back of the scheme.

The frequent meddling of the government in China’s new car market has netted results. According to the China Passenger Car Association, ‘new energy’ vehicles (a term which includes plug-in hybrids and EVs) accounted for 53.3 per cent of the national market.

In Australia, GWM and BYD are storming up the charts and into the top-10, while MG holds its position. This means once-favourites like Nissan and Subaru have now exited the coveted list, with seemingly little chance of return.