Unity China

China EV Industry Faces Squeeze as Tech Race Heats Up

China’s EV industry is advancing rapidly in smart cockpit software and vehicle networking, with Hongqi partnering Unity China on next-generation AIOS design and Ethernovia launching its Shanghai headquarters to support automotive Ethernet and centralized computing. But behind the innovation, the sector’s Q1 2026 profit fell 18% and margins dropped to just 3.2%, highlighting how battery costs, lithium prices, and fierce competition are reshaping the Chinese EV market.