Automotive industry

Toyota has revised its full-year operating profit forecast upward to 3.4 trillion yen, despite a 1.45 trillion yen hit from U.S. tariffs. The September quarter’s operating profit, however, fell short of analyst estimates due to these tariffs, with a nearly 28% year-over-year decline in quarterly profit despite increased revenue. Toyota is exploring exporting U.S.-made vehicles to Japan in response to trade agreements. Analysts expect continued pressure on profitability, with potential recovery contingent on trade stability and currency fluctuations amidst growing EV competition.

The Dutch government seized control of Nexperia, a Netherlands-based chipmaker owned by China’s Wingtech, citing national security concerns, escalating geopolitical tensions. China responded with export controls on Nexperia products, threatening global automotive production due to reliance on these essential chips. Automakers warned of potential production cuts. Diplomatic efforts are underway, with possible exemptions to China’s export ban being considered, offering a glimmer of hope. The situation highlights the vulnerability of the semiconductor supply chain and growing scrutiny of Chinese-linked tech firms.

Tesla shares fell over 4% after European sales data revealed a 23% year-over-year decline in August EV registrations, contrasting with a 26% rise in overall European EV market. RBC analysts remain optimistic, projecting strong Q3 deliveries driven by U.S. tax credit incentives. Despite a challenging start, Tesla’s stock is up 5% YTD. Analysts suggest Elon Musk’s political involvement might affect the brand. Tesla plans a more affordable model to counter increasing competition.

A prominent automotive blogger, Yan Chuang, publicly distanced himself from Xiaomi’s YU7 electric vehicle, citing concerns over build quality issues like rattling noises. He also criticized Xiaomi’s lack of transparency regarding quality concerns, including reported problems with the carbon fiber hood and autonomous driving systems. The controversy has sparked debate, with some praising his advocacy for consumer rights, while others question his motives. This incident underscores the challenges Xiaomi faces in the automotive market, highlighting the need for robust quality control and transparent communication to maintain consumer trust.

BYD reported record first-half 2025 revenue of ¥371.3 billion, surpassing Tesla for the first time. The company emphasized strengthening industry collaboration through proactive coordination, optimizing payment terms, and fostering a mutually beneficial ecosystem for stakeholders. BYD highlighted its already low DPO and further reductions compared to 2024, prioritizing prompt supplier payments. This follows a commitment by BYD and other Chinese automakers to limit payment terms to 60 days, addressing concerns about supply chain pressures and promoting sustainable industry growth.

China Changan Automobile Group Co., Ltd. was officially established in Chongqing on July 29th as a state-owned automotive giant. With a registered capital of 20 billion yuan and Zhu Huarong as legal representative, the company aims to become a globally competitive automotive group with proprietary core technologies. The launch has attracted significant attention, including congratulations from Xiaomi CEO Lei Jun, who pledged collaboration to advance China’s automotive industry.

XPeng Motors has standardized a 60-day payment cycle for suppliers to enhance supply chain resilience, as confirmed by Chairman He Xiaopeng. He stated the change follows extensive internal deliberation and requires operational discipline, positioning it as a sustainable industry improvement. The policy aligns with commitments from 17 major automakers who recently pledged 60-day supplier payment windows, underscoring growing industry recognition of vendor liquidity’s importance.

China has released a White Paper on Intelligent Driving Technology and Industrial Development, co-authored by CATARC, Tsinghua University, and Huawei. This document sets industry standards for intelligent driving, emphasizing safety, operational coverage (0-150 km/h), 360-degree protection, object recognition, all-weather performance, and human-intelligent driving integration. It aims to guide consumers towards trustworthy systems and clarify common misconceptions about smart driving features.

The automotive industry faces unsustainable pressures, according to CNBC AI News. Experts highlight the impossible equation manufacturers face: meeting consumer demands for feature-rich vehicles at low prices. This conflict, exacerbated by consumer expectations and competitive pricing, risks long-term profitability and vehicle value. The People’s Daily cautions against prioritizing price over all else, as extreme cost-cutting harms both manufacturers and consumers through compromised after-sales support and rapid depreciation.

GAC Group announced it will finalize dealer rebates within two months to bolster the automotive supply chain’s financial stability. This move, aligning with regulatory trends and calls for a healthier ecosystem from the China Automobile Dealers Association, follows similar commitments from other automakers. The initiative aims to foster high-quality development within the sector, with industry observers watching for similar actions from other major players like FAW Group and Dongfeng Motor.