China's car market is tanking 20% this year. Worst performance since 2021. This comes after the country sold a record 23.7 million vehicles in 2025.
Let me walk you through the technical setup here. Last year was the best year ever. This year is not the best year ever. That's the entire thesis. Some guy with a Robinhood account and a YouTube subscription is currently drawing trend lines on a chart of Chinese auto sales trying to find support levels. He will not find support levels. He will find a second job.
The beautiful thing about record-high sales is they create record-high expectations. Then when people buy 20% fewer cars the following year, financial journalists act like the country banned transportation. Consumer demand tumbled. That's the word they used. Tumbled. As if 18.96 million cars is a catastrophic failure of capitalism rather than still the second-best year in Chinese automotive history.
Retail traders are now shorting Chinese EV stocks because they read one headline and think they understand supply chains. They do not understand supply chains. They understand that their co-worker Brad bought a Tesla and now they hate Brad. That's the depth of the analysis.
Here's what actually happened. China had a massive year in 2025. Pulled forward a bunch of demand. Now fewer people need cars because they already bought cars. This is not a market collapse. This is what happens when you sell 23.7 million of anything. The next year gets harder.
But some guy named Tyler in Wisconsin is convinced this is his moment. He's going to time the Chinese auto market perfectly from his kitchen table using a free stock screener and confidence he inherited from his father. Tyler will lose money he earned working overtime. Then he'll blame Jerome Powell.
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