EV & High-Value Tires Drive Growth Amid Shift

The current Chinese tire market exhibits a clear trend of differentiation: on one hand, there is stable demand for semi-steel tires, while on the other hand, all-steel tires are entering their off-season. Against this backdrop, the competitive logic of the tire industry is also quietly shifting – more and more companies are turning their attention to high-value-added products such as electric vehicle tires, promoting high-quality growth through product structure upgrades to adapt to the global wave of electrification in the automotive industry.

Semi-steel tires: Stable demand, promising growth

Semi-steel tires are mainly used in the passenger vehicle sector, and their market demand continues to rise steadily. Data shows that China's demand for semi-steel tires exceeded 700 million units in 2025, and is expected to grow further in 2026. At the end of January this year, the domestic semi-steel tire operating rate remained at a high level, with stable production and basically matching market demand.

There are two main factors supporting the demand for semi-steel tires: First, the continued growth in sales of new energy vehicles. The policy of exempting new energy vehicle purchase tax from 2025 will continue, driving strong production and sales, while the customized tire requirements of new energy vehicles (such as low rolling resistance and quiet performance) have also promoted the upgrading and replacement of related tires. Second, the replacement market has a solid foundation.

With the continuous increase in domestic car ownership, the demand for replacing aging tires provides stable support. Coupled with car owners' increasing demands for safety and comfort, this has consolidated the robust performance of the semi-steel tire market.

All-steel tires: Sluggish off-season, struggling to move forward under pressure

Compared to semi-steel tires, all-steel tires have officially entered their seasonal off-season. All-steel tires are mainly used in commercial vehicles and engineering vehicles. Affected by factors such as decreased logistics demand before the Spring Festival and weakened end-user purchasing intentions, market shipments have slowed significantly.

Although the operating rate of all-steel tires in January this year was still higher than the same period in previous years, companies' inventory pressure is gradually increasing. The average inventory turnover days have approached 47 days and are showing a continuing upward trend.

In addition, raw material prices have generally risen, with significant month-on-month increases in the prices of styrene-butadiene rubber, butadiene rubber, and carbon black, further squeezing companies' profit margins. Rising costs, weak demand, and difficulties in promotion constitute the triple pressure currently facing the all-steel tire market.

Transformation Path: Seeking Growth Through High-Value-Added Products

Faced with market differentiation, tire companies are adjusting their strategies, focusing on high-value-added products as a breakthrough direction. Hankook Tire is a typical example. To address the trend of vehicle electrification, Hankook launched the iON series tires specifically designed for electric vehicles.

Through material and process innovation, it has achieved a good balance between rolling resistance, wear resistance, and grip. Since entering the Chinese market, this series has been supplied to multiple new energy brands such as Porsche, BMW, BYD, and Xiaomi, and is also used in driverless taxis, with its market acceptance continuously increasing.

Meanwhile, Hankook is also continuously strengthening its presence in the large-size tire market. In the first half of 2025, its sales of 18-inch and larger tires in the Chinese market accounted for nearly 65%, leveraging the "original equipment manufacturer effect" to drive replacement market share, forming a dual-driven development model of "electric vehicle tires + large-size tires."

Industry Outlook: Continued Differentiation, High-Value-Added Track Becomes Key

Looking at the entire industry, high-value-added tires are becoming an important engine for growth. With the penetration rate of electric vehicles in China exceeding 40%, the market potential for dedicated electric vehicle tires continues to expand. Both foreign brands and domestic companies are increasing their investment in related technology research and development and product expansion.

In the short term, as production resumes after the Spring Festival, the off-season pressure on all-steel tires is expected to gradually ease, but market differentiation will persist. In the long term, high-value-added products such as electric vehicle tires will continue to lead the tire industry towards a higher-quality development stage.