image credit: Bamboo Works
Key Takeaways
Taocheche has become China's largest used-car platform by GMV, but the business comes with razor thin margins and steep losses for operator Yusheng
The broader used car market is finally picking up, helped by policy changes and more price-conscious buyers, even as companies keep searching for a profitable business model
China's used-car market has always looked like it should be fertile ground for success. Vehicle ownership reached 366 million units in 2025, the largest globally. But just 5.5% of that base came from used-vehicle transactions, far below the 12.8% level in the U.S., according to third-party market data in an IPO filing last week by Yusheng Holdings Ltd., operator of Taocheche, which it bills as China's largest used car platform.
And yet, second-hand cars have remained a tough sell in China, where many buyers still prefer new vehicles. Used car transactions have been weighed down by buyer concerns related to hazy vehicle histories, uneven inspections, inconsistent pricing and a fragmented dealer base. Those are exactly the frictions Yusheng says Taocheche can solve.
Many of the company's business metrics show how used car trading can translate to big business. Yusheng reported revenue of 6.66 billion yuan ($924 million) last year, up 21.8% from 2024. Its gross profit for the year totaled 679 million yuan, equating to a gross margin of 10.2%. Its platform handled 191,487 vehicle transactions last year, supported by 62 offline sales centers nationwide.
But none of that matters if a company is losing money, which is definitely the case for Yusheng. The company reported a net loss of 916.9 million yuan in 2025, widening from a 695.5 million yuan loss in 2023 and 574 million yuan in 2024. That shows that while Taocheche has scale, it has yet to find a sustainable business model that yields profits as well.
Late-arriving used-car moment
On paper, at least, the market is finally moving in Yusheng's direction. China's used-car transactions crossed 20 million units for the first time in 2025, reaching 20.1 million vehicles with a transaction value of about 1.3 trillion yuan, or nearly $200 billion, according to the China Automobile Dealers Association.
Policy changes are part of the story. For ...
