New Cars

According to statistics, in the first half of 2026, approximately 630 new car models were launched domestically, averaging 3.5 models per day—the scale of new car launches is more than three times that of smartphones in the same period. On July 16 alone, 8 car companies clustered to hold press conferences, with 6 heavy-hitting new models launched at once, which netizens jokingly called the car circle's "Crazy Thursday".

However, among the 630 new models, only 30 models had monthly sales exceeding 10,000 (accounting for 5.5%), and only 107 models were truly new architectures or vertical upgrades (less than 20%)—more than 80% were annual facelifts, configuration tweaks, new color schemes, or collaboration editions.The fervor on the supply side and the coldness at the terminal form the most glaring cracks in China's car market.

Why do car companies frequently launch new models to grab market share?

With the fierce competition in the car market, why are car companies keen on launching new models? There are mainly three layers of driving forces stacked:

"Positioning Anxiety" under Zero-Sum Competition. Retail sales of passenger cars in the first 5 months reached 7.1 million units, a year-on-year drop of nearly 20%—the market is shrinking, and car companies can only rely on new models to maintain visibility. The fear of "No new launch = Forgotten = Out" drove the frenzy of new models.
Modular Platforms Lower the Threshold for Launching New Models. Electrification + Modular architecture has greatly increased the speed of building cars—multiple models are derived from the same platform, R&D cycles have been shortened from 5-6 years to 2-3 years, and the cost of "Old wine in new bottles" is extremely low.

3. Capital Logic Requires "Growth Curves". Capital markets look at growth, not profits. New car launches create short-term traffic and sales spikes to support valuation—even if there is a loss per vehicle, as long as the sales curve continues to rise, the stock price has support.

Frequent New Car Launches for Buyers: Short-term Benefits, Long-term Risks

In the short term, consumers have more choices—The number of models available in the same price range increased from 5 to 15, increasing consumers' bargaining space; Secondly, configuration trickle-down accelerated—120k level standard 800V, 220k level equipped with intelligent driving, 240k level standard air suspension; previously, configurations only available at 300k are now available at 150k; Finally, prices continue to drop—New cars grabbing share must lower prices, consumers buy cheaper cars in the short term.

In the long term, consumers "Just got the car, it becomes an old model"—McKinsey research shows that over 30% of car buyers feel troubled by "Too many new cars, don't know how to choose", decision cycles are extended; Secondly, model life cycles shorten—A hot-selling model's period shrinks from 12-18 months to 6-8 months, then is submerged by updated new products, resale value drops faster; Finally, quality durability risks—After R&D cycles are compressed, verification time is insufficient, the risk of "Factory rushed out" is exposed only after 3-5 years of use.

Homogenization Vicious Cycle: Automaker Self-Consumption

630 new models do not cover all price bands and categories, but cluster in the same few tracks—Large 5-seater/Large 6-seater SUVs became the layout focus in 2026, configurations went up, identifiability went down. Users are insensitive to range from 700km to 1000km, computing power from 30 TOPS to 1000 TOPS experience differences are far smaller than parameter differences—"The end of parameter competition is imperceptibility, ultimately have to compete on price" (Xu Jun, Vice President of Leapmotor).

The Cost Price of Homogenization: R&D + Marketing + Channel deployment costs for a new car amount to hundreds of millions of yuan, but models with monthly sales less than 10,000 cannot cover these costs—"Pulse-style dissemination" (Launch hot sales -> Production capacity up -> Demand down) causes great waste, manufacturers didn't earn, supply chain didn't earn, users didn't earn either. Market value evaporated over 1.1 trillion yuan for 17 listed car companies in half a year, Seres fell 51%, Changan fell 40%+, BYD evaporated 190 billion yuan—The more new cars launched, the stronger the market value evaporation, this is the "frenzy's" self-retribution.

To Parts Suppliers: The Rift Between Scale and Fragmentation

New cars launched too frequently cause three layers of pressure on suppliers:

Order Fragmentation. 630 car models mean 630 sets of different parts adaptation requirements—Cell specifications are messy, chip models are numerous, molds repeatedly invested. Li Bin stated directly: "Cell specification standardization and chip normalization, the entire industry cost reduction of 100 billion yuan has no problem at all." But the reality is that every new car uses different battery specifications and chip platforms, suppliers are forced to switch production lines frequently, and mass production is interrupted.

Development Cycle Compression. Suppliers follow the vehicle rhythm to accelerate iteration, from 12 months development cycle to 6 months—Verification time is insufficient, quality risks rise. Durability verification for a parts product needs 2-3 years of real-vehicle data, but new car life cycle is only 6-8 months, the verification loop cannot be completed at all.

3. Has Quality and Durability Declined? The Answer is There Are Risks But Not Worsened Comprehensively—Currently, core components (Battery/Motor/Control) of mainstream car companies are still provided by top suppliers, quality bottom line is guaranteed. But non-core components (Interior parts, Small motors, Seals) indeed exist a cost cutting and quality reduction trend—Some car companies compress costs, switch from Tier1 to Tier2/Tier3 suppliers, price reduces 15-20% but durability standards are adjusted down simultaneously. MIIT and SAMR talked to car companies in June, clearly requiring "Cannot cut configurations to reduce quality"—This shows regulators have realized quality risks.

Impact of Frequent New Car Launches on China's Auto Industry

In a positive aspect, Chinese car companies frequently launching new models indeed rolled out global competitiveness—China's new energy vehicle technology iteration speed is the fastest in the world, 800V/3C fast charging/Urban NOA/6-seat layout popularity speed far exceeds Europe, America, Japan; Secondly, rolled out export momentum—Car exports reached 5.096 million units in the first half, year-on-year increase of 65.3%, June monthly exports broke 1 million for the first time, new energy exports year-on-year +124.3%; Finally rolled out supply chain upgrade—CATL/RoboSense/Hesai and other top suppliers' global share continues to expand.

In a negative aspect, Chinese car companies frequently launching new models led to industry profit margins falling to 4.1% reaching a new low of ten years, three years price war cumulative loss 471.2 billion yuan—"Increasing revenue but not profits" has become the norm for the entire industry; Secondly, dealer inventory warning index 57.9% rose for three consecutive months, 17 mainstream brands inventory exceeded two months, rebate fulfillment cycle exceeded 70 days—Offline channel foundation is loosening; Finally, AlixPartners predicts that in the future 30 new energy car companies by 2030 may only have 7 break even—The vast majority of companies launching new cars will be eliminated in the reshuffle.

Overseas: Competing via Capability Exports, But Price Competition Meets Barriers

Chinese car companies' "Competitive Ability" (Technology iteration + Product density + Cost control) after going overseas indeed possesses competitiveness—XPeng MONA L03 launched in 64 countries simultaneously, BYD May Germany sales 6168 units exceeded Tesla. But "Rolling Price" overseas is encountering increasingly strong trade barrier counterattacks!

EU MIP minimum import price mechanism (Replacing 7.8%-35.3% countervailing duties)—Restricted Chinese brands low-price competition strategy; US 25% car tariffs—Toyota due to tariffs reduced 8.5 billion yuan operating profit, Chinese brands harder to bear; Southeast Asia localization requirements—Thailand, Indonesia require parts local ratio over 40%, otherwise tariff levied; Chinese car companies overseas "Internal competition spilling over"—Some brands irrational price reduction in the same overseas market, overdrawn "China New Energy" collective brand assets, triggering more tariffs and inspection barriers.

Xu Jun, Vice President of Leapmotor, admitted: "Agreeing that going overseas is the core exit to escape internal competition, but overseas internal competition is quietly spreading."

Final Thoughts: Impact on Supply Chain, Car Buyers, and Global Auto Industry

Launching 630 new models in the first half of the year, and "Crazy Thursday" is the epitome of the car market's extreme internal competition—Short term gives consumers more choices and lower prices, but long term is retaliating against the entire supply chain: Car company profits evaporated, suppliers fragmented, dealers inventory crisis, quality durability risks, overseas trade barrier upgrade. MIIT and SAMR's talks released a clear signal: "Stacking numbers, pressing prices old road cannot work." China's car market's next step is not to continue rolling out more new cars, but From "Quantity" to "Quality"—Less cars, push good cars, push long-life cars. A classic car's R&D needs 5-6 years, Tesla Model 3 launched 7 years still is benchmark—"Slow" value, is the confidence for a long race. After the noise of 630 new models, what China's car market needs is not more "Crazy Thursday", but less restlessness and deeper accumulation.