[SMM Analysis] NEV inventory remains high, and enterprises should reasonably control the pace of production and sales

In 2025, the NEV market exhibited a relatively complex development trend, with its inventory situation reflecting multifaceted market characteristics.

As of May 2025 month-end, the total inventory in China's passenger vehicle industry reached 3.45 million units, down 50,000 units MoM but up 160,000 units YoY. According to CPCA, NEV manufacturers' passenger vehicle inventory rose from 660,000 units in December 2024 to 880,000 units in May 2025. However, based on the inventory coefficient, the comprehensive dealer inventory coefficient stood at 1.38 in May 2025, down 2.1% MoM and 4.2% YoY.

Meanwhile, some brands showed higher inventory coefficients. The three brands with the deepest inventory depth in May 2025 were BYD, Jaguar Land Rover, and Chery. As a representative NEV brand, BYD's inventory coefficient remained elevated at 3.21 months according to CADA data, reflecting both strong market attention and certain inventory pressure.

The risks associated with high inventory should not be underestimated. The 3.45 million-unit inventory scale hit a two-year high, with rising NEV manufacturer inventories directly translating into dealers' financial pressure and operational risks. Vehicle depreciation, increased capital occupation costs, and potential unsold risks all test dealers' resilience. For NEV manufacturers, rational inventory control is crucial. Production plans should be flexibly adjusted based on market demand to avoid overstocking, while optimizing sales channels and enhancing product competitiveness can accelerate inventory turnover and mitigate operational risks.

In May 2025, the inventory coefficient for high-end luxury & imported brands was 1.31, down 1.5% MoM; joint venture brands stood at 1.21, down 11.7% MoM; and domestic brands reached 1.51, up 2.7% MoM. Some NEV brands like BYD maintained high inventory coefficients, while traditional luxury brands such as Jaguar Land Rover saw their NEV car models' underperformance failing to improve overall inventory conditions, highlighting the intense NEV market competition and developmental disparities among brands.

From May to June, wholesale sales data revealed distinct structural characteristics and complex trends. Inventory at mainstream domestic automakers rose significantly compared to year-end 2024, reflecting optimistic expectations for 2025 market growth and relaxed inventory safety margins. Luxury vehicle inventories also increased, while foreign brands maintained relative stability.

Despite the current strong market growth momentum, the traditional off-season from June to August will exert some downward pressure on sales. From the inventory perspective, a higher inventory cycle implies that the industry needs to reasonably control the pace of production and sales. In the future, with the further development of the NEV market and intensified competition, brands need to pay more attention to inventory management to achieve sustainable development.

SMM New Energy Industry Research Department

Wang Cong 021-51666838

Ma Rui 021-51595780

Feng Disheng 021-51666714

Lv Yanlin 021-20707875

Zhou Zhicheng 021-51666711

Zhang Haohan 021-51666752

Wang Zihan 021-51666914

Wang Jie 021-51595902

Xu Yang 021-51666760

Chen Bolin 021-51666836