Guangzhou Automobile Group (GAC), a major Chinese state-owned automaker, is struggling with intense price competition in the electric vehicle market, reporting losses of RMB 8,300 (USD 1,221.8) per vehicle sold under its brands at one point in 2025.
The rapid deterioration in the company’s performance could impact negotiations over its joint venture contract with Japan’s Honda Motor, an agreement that is set to expire in 2028.
“In China’s market in 2025, the decline in prices for our main models was the steepest in the past five years,” GAC said in materials distributed in mid-March, when it said it expected a net loss for the year ending December 2025. This would mark the company’s first full-year loss since its listing on the Hong Kong Stock Exchange in 2010.
GAC’s EV brand Aion ranked third in retail sales of new energy passenger vehicles in China in 2023, behind BYD and Tesla. The line was seen as a success, especially as the state-owned automaker had fallen behind in EVs for younger buyers.
But conditions changed dramatically in just two years. In 2025, GAC’s sales of vehicles under its own brands, just over 30% of total sales, fell 20% from the previous year to 600,000 units. Including joint ventures, overall sales dropped 14% to 1.72 million units. The results contrast with those of rivals such as BYD and Geely, which posted increases over 2024, as well as newer players like Xiaomi and Xpeng, which also gained ground.
