China‘s auto industry is undergoing the broadest executive pay and headcount reset in its history, as chairmen at state-owned and private automakers take personal compensation cuts of 40% or more.
Additionally, year end bonuses are — in some cases — vanishing across entire sales regions, and even profitable carmakers are shedding tens of thousands of jobs to automation, Sina first reported on Monday.
As recently disclosed in its annual filing, BYD closed 2025 with nearly 100,000 fewer workers than a year earlier.
Speaking earlier this month at the Smart Electric Vehicle Development High-Level Forum, China Passenger Car Association (CPCA) Secretary-General Cui Dongshu warned of high pressure.
“The total volume looks passable, but domestic consumption is under immense growth pressure and remains highly volatile,” Cui said.
The CPCA expects total Chinese auto wholesale volumes to rise between zero and 1% in 2026, with falling domestic sales offset by surging exports.
A UBS research note cited by Sina estimated that tapering stimulus measures, the reinstatement of purchase taxes, and rising commodity costs could add 4,000 to 7,000 yuan ($587—$1,027) to the cost of a mid-size EV.
Executives Lead the Cuts
The reset has moved top-down, with chairmen and senior executives taking the largest personal compensation cuts.
GAC Group Chairman Feng Xingya saw his annual compensation more than halve from 1.984 million yuan in 2024 to 939,300 yuan in 2025 — a reduction of more than 1 million yuan, or 53%.
Other GAC Group executives absorbed cuts ranging from 500,000 to 700,000 yuan — equivalent to $73,300 to $102,700.
The automaker is rolling out what it calls the “3P1M” compensation reform, tying pay deeply to role contribution, performance and market conditions, alongside a 10% cost reduction in 2025 and a 15% target for 2026.
SAIC Group followed a similar pattern.
Total executive compensation at the state-owned Shanghai-based group fell to 19.04 million yuan in 2025 from 28.10 million yuan a year earlier — a reduction of more than 9 million yuan ($1.32 million).
Chairman Wang Xiaoqiu’s personal package dropped 848,100 yuan to 1.52 million yuan in 2025, the largest individual cut among SAIC Group executives.
Year-End Bonuses Stripped
Li Auto, once the benchmark for profitability among China’s new EV brands, has stripped year-end bonuses from entire sales regions.
Its 2025 net profit fell 85.8% on deliveries of 406,300 vehicles.
The company eliminated year-end bonuses for front-line and middle-office staff across 26 sales provinces, while halving bonuses for research and development employees.
Li Auto is also closing approximately 100 inefficient stores — about 18% of its total network — and rolling out a “store partner” mechanism to shift fixed costs to independent operators.
Great Wall Motor has taken a different approach, cancelling stock options entirely after the company failed to meet its performance targets for 2025, the Sina analysis noted.
Founder and CEO William Li personally took part in supply-chain cost control in 2025, demanding pricing precision to four decimal places as the company targeted — and achieved — its first ever profitable quarter in Q4 2025.
The company’s board has recently granted Li a long-term incentive plan covering 248.5 million restricted share units — equivalent to roughly 10% of Nio‘s outstanding shares — according to the annual report filed with US regulators.
The award is split into ten equal tranches vesting over a 12-year term, each contingent on reaching both market-capitalisation and net-profit milestones.
Total cash compensation to all of Nio‘s directors and executive officers combined came to approximately $2.2 million for 2025, the company disclosed in its annual report filed with US regulators on Friday.
Headcount Follows
The compensation reset is paired with the sharpest workforce reductions in the industry’s history.
Nio disclosed earlier this month that its workforce shrank by more than 10,600 people in 2025, ending the year with 35,032 full-time employees — down from 45,635 a year earlier — making it the sharpest single-year reduction since the company’s 2018 IPO.
R&D spending fell from 13 billion yuan to 10.6 billion yuan, with R&D personnel compensation alone dropping 1.2 billion yuan.
EV exclusively reported throughout 2025 on specific job reductions affecting not only Nio‘s China headquarters but also its European and US operations, including the June suspension of US expansion.
BYD cut roughly 100,000 jobs in 2025, ending the year with approximately 870,000 employees — down from 968,900 — based on the Shenzhen-based group’s annual report.
It was the first major headcount decline for China‘s largest private-sector employer and came despite record sales of 4.6 million new energy vehicles.
The reduction — equivalent to about 10% of BYD‘s peak workforce — was driven by automation rather than slowing demand, with industrial robots displacing production-line workers across the manufacturing network, iFeng reported.
Dongfeng‘s D600 smart factory offers the most extreme example: front-line headcount slashed from 400 to 40 by fully automating core production processes, according to the Sina report.
The remaining workers shifted from competing on physical labour to competing on judgment, with traditional quality inspectors retrained as battery diagnostic experts.
The XPeng Outlier
XPeng stands alone among major Chinese EV makers in expanding both headcount and compensation in 2025.
The Guangzhou-based automaker added 4,520 employees — a 29.4% increase to 19,884, the biggest annual expansion in the company’s history as a public company — as EV reported based on the 20-F filing.
The hiring surge coincided with the fastest revenue growth in XPeng‘s public history, with total revenue rising 87.7% to 76.72 billion yuan and the company recording its first-ever quarterly net profit in the fourth quarter.
Research and development (R&D) alone added 2,645 employees — a 42.7% annual jump — bringing R&D to 8,845 people, or 44.5% of total headcount — the highest share in the company’s public history.
“Scale allows us to survive in competition,” XPeng co-founder, chairman and CEO He Xiaopeng told investors on the March 20 earnings call, adding that leadership in physical AI would define the company’s competitive advantage.
The divergence is visible in revenue-per-employee data: XPeng rose 45.2% to 3.86 million yuan per employee, Nioreached 2.50 million yuan and BYD came in at approximately 924,000 yuan.
‘Anti-Involution’
The cuts have taken place under what China‘s Ministry of Industry and Information Technology calls “anti-involution” — 反内卷, the state’s banner for curbing destructive intra-industry competition — which was launched as a formal campaign in 2025.
At the Intelligent Electric Vehicle Development High-Level Forum 2026 earlier this month, Nio‘s chief told attendees that standardising battery cells and unifying chip specifications across the Chinese industry alone could save on the order of 100 billion yuan in costs.
Widening Gap
The scale of China‘s executive compensation reset stands in sharp contrast to the direction of Western EV boards.
Tesla shareholders in early November 2025 approved a compensation plan for Elon Musk worth as much as $1 trillion if all stock-price and operational milestones are hit over a 10-year period — the largest corporate pay package on record.
Shortly after, Rivian‘s board announced a new pay plan for founder and CEO RJ Scaringe.
Worth as much as $4.6 billion over 10 years, the plan is structured along the same stock-milestone model, with base salary doubled to $2 million and a 10% economic interest in Rivian‘s Mind Robotics spinoff on top.
Earlier this month, Lucid‘s board adopted a market-capitalisation-linked package for incoming CEO Silvio Napoli, combining a $1.5 million base salary with up to 1 million stock options tied to Lucid reaching market-cap milestones of $5 billion, $10 billion, $15 billion and $17.5 billion.
The structural similarity is visible — all three packages tie the bulk of CEO compensation to market-capitalisation milestones over long horizons.
In China, SAIC Group‘s entire executive team took home 19.04 million yuan in total compensation for 2025 — approximately $2.8 million at current exchange rates.
The figures are roughly one-third of Scaringe’s $2 million base salary, combined with the typical cost of his equity grant’s first-year vesting value.
Nio‘s entire director and executive officer compensation combined came to approximately $2.2 million for 2025.
That is less than Scaringe’s $2 million base salary with one month’s prorated equity overhead.
