China’s auto finance market is undergoing structural changes. The market size is expected to exceed 5.25 trillion yuan in 2025, doubling from 2013. The penetration rate of new car finance is expected to reach 73%, and the penetration rate of used car finance will exceed 52%. Commercial banks occupy 42% of the market share with their capital cost advantage, followed by auto finance companies relying on the resources of OEMs. Financial leasing companies and Internet financial platforms form differentiated competition with a share of 17%. It is worth noting that commercial banks have accelerated their penetration through the “car loan + ecology” strategy. In 2024, the balance of new energy vehicle loans surged by 204% year-on-year. Some city commercial banks have launched innovative products such as “5-year 60-term zero interest” to seize the market of young customers.
New energy vehicle finance is growing explosively
In 2023, 25 auto finance companies nationwide issued a total of 1.6563 million new energy vehicle loans, a year-on-year increase of 42.93%. Tesla, BYD and other automakers have launched a combination product of “battery leasing + body installment”, which breaks down the vehicle purchase cost into three parts: “down payment + monthly payment + battery monthly lease”, reducing the consumer’s down payment ratio to less than 15%. Financial institutions are also developing residual value guarantee products to hedge the risk of battery degradation through OEM repurchase agreements, pushing the financial penetration rate of new energy used vehicles to exceed 40% in 2025.
AI reshapes the risk control system
Leading institutions have introduced large-scale model skill such as DeepSeek to build a three-in-one risk control system of “multimodal biometrics + device fingerprint + behavioral profiling”. An automobile finance company reduced the first loan delinquency rate from 2.3% to 0.8% by analyzing 1,200+ dimensional features such as user e-commerce consumption data and social relationship networks. Blockchain skill is applied to vehicle property registration and transaction evidence. A platform uses smart contracts to automatically handle loan settlement and mortgage release procedures, and the processing time is compressed from 7 days to 15 minutes.
Financial institutions and automakers build an “showroom + financial supermarket” model, where consumers complete the entire process of “car selection – test drive – financial solution matching – contract signing” on platforms such as Dongchedi. WeBank launched the “Wei Auto Loan” product, which integrates data from than 20 auto companies through federated study skill, customizes intelligent marketing solutions for new energy auto companies, and increases the lead conversion rate by 40%. By 2025, it is expected that than 60% of auto finance business will be completed through API interfaces embedded in auto companies’ own apps.