May Auto Market Share Reshuffle: Tesla, Leapmotor, and AITO Rise; New Forces Face Short-Term Pressure
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May Auto Market Share Reshuffle: Tesla, Leapmotor, and AITO Rise; New Forces Face Short-Term Pressure
Morgan Stanley reviews China's electric vehicle market in May, noting that Tesla, Leapmotor, and AITO have increased their market shares; XPeng, Li Auto, and NIO have seen short-term declines due to model transitions or delivery rhythms, but are expected to rebound as new models ramp up production.
- Tesla's China EV market share rose by 2.0 ppt month-on-month to 5.2%, Leapmotor climbed by 0.8 ppt to 6.8%, hitting a new high; AITO gained 1.0 ppt to 3.8%.
- XPeng's May share fell by 0.3 ppt month-on-month to 2.8%, but deliveries of the GX model began mid-May, which is expected to support its share recovery in the coming months.
- Li Auto's share dropped by 0.4 ppt month-on-month to 3.6%, affected by sluggish sales before the L series facelift; the new L8 will be unveiled on June 23.
- NIO's share declined slightly by 0.2 ppt month-on-month to 3.9%; wholesale volume grew by 28%, and new models such as L60, L80, and ES9 will help improve its performance.
- Xiaomi's share fell by 0.9 ppt month-on-month to 3.6%; the sales boom for the SU7 after its facelift has subsided; BYD's Ocean/Dynasty series share dropped by 1.0 ppt to 17.5%.
- Among luxury brands, Mercedes-Benz's China share declined slightly by 0.1 ppt, and BMW's China share fell by 0.4 ppt.
Report interpretation
Overview
This report tracks the competitive landscape changes in China's electric vehicle market in May 2026. The core conclusion is that the market shows structural differentiation: Tesla, Leapmotor, and AITO (AITO) achieved significant growth in market share in May, with Leapmotor reaching a new historical high. Meanwhile, some leading new forces like XPeng, Li Auto, and NIO, as well as certain series from Xiaomi and BYD, experienced short-term month-on-month declines in market share due to model transition gaps or delivery rhythm issues. The firm believes that as XPeng's GX, NIO's new models, and upcoming new vehicles from Li Auto and BYD hit the market, these brands' order momentum and market shares should recover and improve in the short term. Overall industry sentiment remains 'In-Line'.
Core views
Winning Camp: Tesla, Leapmotor, and AITO Perform Strongly. Tesla's China EV market share surged by 2.0 percentage points month-on-month to 5.2%, achieving growth across all cities. Leapmotor's EV market share rose by 0.8 percentage points month-on-month to 6.8%, reaching an all-time high. AITO's share climbed by 1.0 percentage point month-on-month to 3.8%, showing sustained growth momentum. Short-Term Adjustment Camp: XPeng, Li Auto, NIO, and Xiaomi. XPeng's May market share fell by 0.3 percentage points month-on-month to 2.8%, mainly because the new GX model started deliveries only in mid-May, contributing limitedly throughout the month, but it is expected to support share growth in subsequent months from current levels. Li Auto's share dropped by 0.4 percentage points month-on-month to 3.6%, as orders for the L9 were offset by weaker sales of other L-series models before the facelift; however, the new L8 will be unveiled on June 23, which is expected to boost momentum. NIO's share declined slightly by 0.2 percentage points month-on-month to 3.9%; although wholesale volume grew by 28% in May, some sales may be delayed until next month's registrations; with the launch of the L60 and deliveries of the L80 and ES9, monthly share is expected to improve. Xiaomi's share fell by 0.9 percentage points month-on-month to 3.6%, as the sales boom for the SU7 after its facelift has subsided and returned to normal levels. Traditional Giants and Luxury Brands: BYD's Ocean/Dynasty series market share dropped by 1.0 percentage point month-on-month to 17.5%. Among luxury European brands, Mercedes-Benz's China passenger car market share declined slightly by 0.1 percentage point month-on-month, and BMW's China share fell by 0.4 percentage points month-on-month, indicating some pressure on luxury fuel and pure-electric transitions.
Analysis framework
The firm uses a high-frequency monthly market share tracking method, comparing each brand's monthly sales volume to the total market sales volume to assess marginal changes in the competitive landscape. The analytical logic focuses on the impact of 'model cycles' on market share: distinguishing between share declines caused by product weakness and those resulting from temporary fluctuations due to new-to-old model transitions (such as before Li Auto's L-series facelift or XPeng's GX just starting deliveries). At the same time, combining the timing of upcoming new models (such as BYD's Tang and Li Auto's new L8), the report predicts the path for short-term order recovery. This approach helps investors filter out noise and identify genuine trend winners (like Leapmotor and AITO) and temporary laggards.
Methodology notes
Market Share Reshuffling Analysis
By tracking the changes in each brand's share of total market sales volume, we can determine whether the industry's competitive landscape is moving toward concentration or dispersion, and which brands are taking market share from competitors.
Model Cycle Impact on Sales
In the automotive industry, new car launches and old model facelifts significantly affect short-term sales and market share. The report leverages this common knowledge to explain why some brands experience weak sales before facelifts, while initial deliveries of new models bring marginal improvements in market share.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- TeslaBenefit: Significant share increase, growth across all cities
- Strengths
- Strong brand power, stable competitiveness across all models
- Comparison
- Leading in the luxury pure-electric segment, with share rising against the trend
- LeapmotorBenefit: Record-high market share
- Strengths
- High cost-performance ratio, complete product matrix
- Comparison
- Outstanding among second-tier new forces, surpassing some leading brands in growth rate
- XPengShort-term pressure, expected improvement: GX new model deliveries begin
- Strengths
- Advantages in intelligent driving technology, strong potential for the new GX model
- Weaknesses
- Short delivery period in May, not fully reflected yet
- Comparison
- Short-term share lagging behind Li Auto and NIO, but rebound momentum is clear
- Risks
- New car market acceptance lower than expected
- NIOShort-term pressure, expected improvement: Multiple models undergoing facelifts/new releases
- Strengths
- Premium brand positioning, strong service network advantage
- Weaknesses
- Sales slowdown during the clearance phase of older models
- Comparison
- Wholesale volume surged but registrations lagged; future months' data promising
- Risks
- Increased competition in the premium market
- Li AutoShort-term pressure, expected improvement: New L8 set to launch soon
- Strengths
- Precise family car positioning, steady orders for the L9
- Weaknesses
- Weak sales before the facelift of other L-series models
- Comparison
- Still maintaining relatively high share, but needs new models to drive growth
- Risks
- Delayed new model release or lower-than-expected sales
- XiaomiShort-term correction: Heat naturally subsides after SU7 facelift
- Strengths
- Ecosystem synergy, traffic advantages
- Weaknesses
- High dependency on a single model, requires continuous innovation after the heat fades
- Comparison
- Share falling from high levels, entering a stabilization phase
- Risks
- Timing of subsequent model launches
- BYDStructural adjustment: Ocean/Dynasty series share slightly down
- Strengths
- Scale effect, cost control
- Weaknesses
- Some series facing competitive pressure
- Comparison
- Large overall base, minor fluctuations are normal; new model Tang set to launch soon
- Risks
- Price wars intensifying, impacting profit margins
Key data
- Tesla China EV Share5.2%Up 2.0 ppt month-on-month
- Leapmotor EV Share6.8%Up 0.8 ppt month-on-month, hitting a new high
- AITO EV Share3.8%Up 1.0 ppt month-on-month
- XPeng Market Share2.8%Down 0.3 ppt month-on-month
- Li Auto Market Share3.6%Down 0.4 ppt month-on-month
- NIO Market Share3.9%Down 0.2 ppt month-on-month, wholesale volume +28%
- Xiaomi Market Share3.6%Down 0.9 ppt month-on-month
- BYD Ocean/Dynasty Share17.5%Down 1.0 ppt month-on-month
Impact & implications
The report suggests that May's data indicates that competition in China's EV market remains fierce, but the key to victory lies in the pace of new model launches and product strength. For investors, they shouldn't be bearish on brands like XPeng and NIO just because of a single-month share decline, as their new model cycles are about to bring positive contributions. On the contrary, the continued share expansion of Leapmotor and AITO validates the effectiveness of their product structures. The upcoming June new car releases (BYD Tang, Li Auto's new L8) will be critical nodes for testing each brand's order resilience.
What to watch
- Order status after BYD Tang's June 17 launch
- Market feedback after Li Auto's new L8 launch on June 23
- The full delivery data of XPeng GX, NIO L60/L80/ES9 in June and subsequent months, and their impact on market share