China Passenger Car Association: In February, China's new energy vehicle retail sales reached 464,000 units, a year-over-year decrease of 32%.

1.2 February National Passenger Car Market Review

Retail: From February 1-28, retail sales of passenger cars nationwide totaled 1.034 million units, down 25.4% year-on-year and down 33.1% month-on-month. Since the beginning of this year, cumulative retail sales reached 2.578 million units, a decrease of 18.9% compared to the same period last year. Due to complex market factors, recent years have shown a clear “low at the beginning, high at the end” pattern in annual sales. Disruptions such as the Spring Festival cause significant fluctuations in February retail YoY figures—e.g., 2019 -19%, 2020 -79%, 2021 +373%, 2022 +5%, 2023 +10%, 2024 -21%, 2025 +26%. Therefore, the -25.4% decline in 2026 represents a relatively low point amid historically volatile February growth rates.

Since the implementation of the new energy vehicle purchase tax exemption policy in September 2014, which officially ended at the end of December 2025, the new energy vehicle market in 2026 is in a period of tax subsidy adjustment recovery. Some consumers pre-emptively enjoyed policy benefits in 2025, leading to a certain short-term overshoot in January-February 2026, which is within expectations and does not reflect long-term market trends. This year is also a major consumption year before the Spring Festival, with differentiated growth in the auto market. New energy vehicles underperform, still requiring more policy support.

Features of the passenger car market in February 2026: First, the average daily export volume of passenger cars by manufacturers hit a new record high, indicating China’s automotive industry continues to strengthen its competitiveness globally, with sustained overseas demand. Second, retail sales declined sharply after the expiration of purchase tax exemptions, but structural changes are evident—higher proportion of high-end new energy vehicles and lower entry-level consumption, favoring industry transformation toward higher quality. Third, new car launches in 2026 are stable, combined with efforts to curb disorderly price cuts, with new energy promotional activities maintaining around 10.4% in February, sustained for six months, avoiding destructive price competition and helping maintain market order. Fourth, the historical pattern of fuel vehicles outperforming new energy vehicles before the Spring Festival continued, with fuel vehicle retail YoY down 19%, pure electric down 35%, extended-range down 16%, plug-in hybrid down 31%. As consumers gradually adapt to normalizing EV taxes, the new energy market is expected to return to positive growth. Fifth, February remains a period dominated by fuel vehicle consumption before the Spring Festival, with retail penetration rates of 44.9% for new energy vehicles domestically and 48.5% for exports, showing good performance. Sixth, in February 2026, autonomous fuel vehicle exports reached 247,000 units (+21% YoY), and autonomous new energy vehicle exports hit 231,000 units (+110% YoY), with new energy accounting for 48.4% of autonomous exports, especially high growth in Europe and Southeast Asia, indicating China’s new energy vehicle brands are expanding their influence internationally and laying a solid foundation for future export growth.

In February, retail sales of independent brands reached 630,000 units, down 30% YoY and down 29% MoM. The domestic retail share of independent brands was 61.2%, down 4.3 percentage points YoY. Independent brands gained significant growth in new energy and export markets. Leading traditional automakers like Geely, Changan, and Great Wall showed strong transformation and increased market share.

Mainstream joint venture brands sold 270,000 units in February, down 19% YoY and 43% MoM. In February, German brands accounted for 18.2% of retail share (+1.2 pp YoY), Japanese brands 12.1% (+1.5 pp YoY), American brands 6.8% (+1.8 pp YoY). Korean brands saw slight increases.

Luxury car retail: 130,000 units, down 12% YoY and 27% MoM. Luxury brands’ retail share was 12.7%, up 2 percentage points YoY, indicating stabilization in the traditional luxury market.

Exports: According to CAAM data, passenger car exports (including complete vehicles and CKD) reached 555,000 units in February, up 56.0% YoY but down 4.4% MoM. New energy vehicles accounted for 48.5% of total exports, a 15 percentage point increase YoY. Autonomous brand exports hit 478,000 units (+52% YoY), joint venture and luxury brands exported 77,000 units (+85% YoY).

Production: In February, passenger car production was 1.373 million units, down 21.0% YoY and 31.5% MoM. Luxury brand production declined 9% YoY, down 40% MoM; joint ventures down 22% YoY, down 32% MoM; independent brands down 22% YoY, down 30% MoM.

Wholesale: February wholesale of passenger cars nationwide was 1.518 million units, down 14.3% YoY and 23.0% MoM. Due to retail adjustments, wholesale growth outpaced retail by 11.1 percentage points. Independent brands wholesaled 1.074 million units (-14% YoY, -19% MoM), mainstream joint ventures 283,000 units (-20% YoY, -32% MoM), luxury brands 161,000 units (-2% YoY, -30% MoM).

The overall wholesale pattern of key passenger car manufacturers continued to evolve, with companies like Geely, SAIC, Tesla, GAC Toyota, Dongfeng, Leapmotor, Li Auto, GAC Trumpchi, NIO, BAIC, Beijing Hyundai, and others showing YoY growth. Three manufacturers with over 100,000 units wholesale in February (down from four in January and the same as last year) accounted for 36% of the market (previous month 40%, last year 39%). Manufacturers wholesaling 50,000-100,000 units accounted for 29% (previous month 24%, last year 22%), and those with 10,000-50,000 units 29% (previous month 31%, last year 35%).

Inventory: With relatively stable manufacturing in February, wholesale exceeded production by 150,000 units, and retail sales exceeded wholesale by 70,000 units. Overall, passenger car channel inventory decreased by 220,000 units YoY (vs. 40,000 units decrease last year). February was a period of production reduction and inventory destocking, contrasting with last year’s retail-driven inventory decline.

New energy vehicles: February production reached 645,000 units, down 21.3% YoY. Cumulative January-February production was 1.585 million units, down 10.1% YoY. February wholesale of new energy vehicles was 723,000 units (-13.1%), and January-February total was 1.589 million units (-7.9%). Conventional fuel vehicle wholesale in February was 800,000 units (-15%).

Market retail of new energy vehicles in February was 464,000 units, down 32.0% YoY; January-February retail was 1.060 million units, down 25.7%. Conventional fuel vehicle retail: 570,000 units, down 19%.

New energy vehicle exports in February reached 269,000 units (+124.7%), down 7.0% MoM; January-February total exports were 559,000 units (+114.7%). Conventional fuel vehicle exports in February were 290,000 units (+21%).

1. Wholesale: February new energy vehicle wholesale penetration was 47.6%, up 1 percentage point from February 2025. Autonomous brand new energy vehicle penetration was 58.9%; luxury new energy vehicles 48.2%; mainstream joint venture new energy vehicles only 4.6%.

February pure electric wholesale: 421,000 units (-12.2% YoY, -16.9% MoM); plug-in hybrid: 246,000 units (-12.9% YoY, -11.5% MoM); extended-range: 55,000 units (-20.1% YoY, -32.1% MoM). In the structure of February new energy wholesale: pure electric 58.3% (+0.6 pp YoY, -0.2 pp MoM), plug-in hybrid 34.1% (+0.1 pp YoY, +2.0 pp MoM), extended-range 7.6% (-0.7 pp YoY, -1.8 pp MoM).

February B-class electric vehicles: 147,000 units (+16% YoY, -26% MoM), accounting for 35% of pure electric, up 8.5 pp from last year. The A00 and A0 economy segments face significant pressure; A00 wholesale: 47,000 units (-61% YoY, +8% MoM), 11% of pure electric; A0 wholesale: 122,000 units (+3.9 pp YoY); A-class electric: 84,000 units, 20% of pure electric, slight YoY decline. The growth of economy EVs is sustainable; widespread adoption of affordable EVs is key to boosting the market.

In February, 8 passenger car models with over 20,000 units wholesale (down from 17 last month): Model Y (41,404), Geely Xingyuan (37,859), BYD Song (34,071), Chery Explorer 06 (24,564), Geely Boyue (23,303), Chery Tiggo 7 (20,416), Xiaomi YU7 (20,196), Seagull (20,190).

2. Retail: February new energy vehicles’ retail penetration in the domestic passenger car market was 44.9%, down 4 percentage points YoY. Among domestic brands, new energy retail penetration was 64.5%; luxury brands 32.6%; mainstream joint ventures only 4.5%. In February, independent brands’ retail share of new energy vehicles was 60.3%, down 12 pp YoY; joint venture brands 3.1%, up 1.2 pp; new entrants (like Leapmotor, NIO, Xpeng) accounted for 27.3%, with a YoY increase of 7 pp; Tesla’s share was 8.2%, up 4.3 pp.

3. Export: February new energy passenger car exports reached 269,000 units (+124.7%), down 7.0% MoM, accounting for 48.5% of total passenger car exports, up 14.8 pp YoY. Pure electric accounted for 58% of new energy exports (59% last year). The core A00 and A0 pure electric segment made up 55% of electric exports (56% last year). As China’s new energy vehicle scale and market expansion grow, more Chinese brands are going abroad, with recognition increasing overseas. Plug-in hybrids accounted for 38% of new energy exports (+0% YoY). Despite external disruptions, exports to developing countries are growing rapidly, with promising prospects. Leading export companies in February include BYD (98,706 units), Geely (40,852), Chery (28,304), Tesla China (20,393), SAIC (14,138), Leapmotor (9,769), SAIC-GM Wuling (9,568), Dongfeng (8,888), Changan (6,031), Volvo Asia-Pacific (4,918), Zhidong (3,978), XPeng (3,648), Polestar (3,544), Changan Mazda (1,742), Great Wall (1,626), Dongfeng Honda (1,560), BAIC (1,455), GAC Aion (1,295), Seres (湖北) (1,062). Other brands also have export volumes.

Regarding overseas manufacturing, some independent brands’ CKD exports are high: Great Wall CKD 52%, SAIC-GM Wuling CKD 35%, SAIC passenger car CKD 3%. Overseas production of fuel vehicles exceeds 500,000 units, plus CKD exports of new energy vehicles, with total overseas sales expected to surpass 9 million units.

4. Automakers: February new energy vehicle companies performed strongly overall, with BYD’s dual drive of pure electric and plug-in hybrid consolidating its leading position among domestic brands. Companies like BYD, Geely, Chery continue to show strong performance in plug-in hybrids. As autonomous car companies adopt multi-pronged strategies, their market base continues to expand. In February, 16 manufacturers sold over 10,000 units, accounting for 90.9% of total new energy passenger cars (up from 90.5% last month and 91.6% last year). Top performers include BYD (187,782), Geely (117,488), Tesla China (58,599), Changan (40,886), Chery (36,091), Leapmotor (28,067), SAIC-GM Wuling (26,874), Li Auto (26,421), SAIC (21,962), Dongfeng (21,817), NIO (20,797), Xiaomi (20,414), XPeng (15,256), Great Wall (12,741), GAC Aion (11,742), Seres (10,025).

In the domestic market, brands with retail sales exceeding 20,000 units of new energy vehicles include: BYD (88,697), Geely (76,636), Tesla China (38,206), Changan (28,220), HarmonyOS Smart (28,212), Li Auto (26,421), NIO (20,750), Xiaomi (20,414).

5. New Entrants: February new entrants’ retail share was 27.3%, up 7 pp YoY. Pure electric models among new entrants accounted for 73.4% of sales, a significant increase from 64.9%. The 100-150k price segment saw substantial growth. Independent traditional automakers’ new energy brands performed well, with a 17.1% share, up 3 pp YoY. Brands like Shenlan, Yipai, Zeekr, Arcfox, and Lantu performed strongly.

6. Conventional Hybrid: February wholesale of conventional hybrid passenger vehicles was 52,000 units, down 3.4% YoY and 29% MoM. Key players include GAC Toyota (24,060), FAW Toyota (21,657), Changan Ford (2,475), Dongfeng Honda (1,603), GAC Honda (1,351), Dongfeng (1,152). The hybrid market remains relatively strong, especially in overseas markets for independent brands.

2.3 Market Outlook for March 2026

March has 22 working days, one more than March 2025. As industries rapidly resume normal operations after the Spring Festival, month-on-month production and sales are expected to grow rapidly.

Post-holiday is a key period for new product launches, with many manufacturers releasing new models. Under national policies to stimulate consumption, many provinces and cities have introduced supportive measures, and offline events like auto shows are fully resuming, which will accelerate consumer interest. Due to recent high prices of lithium carbonate, copper, and other materials, and ongoing anti-inflation efforts, few manufacturers are expected to launch highly cost-effective new energy models beyond expectations. The market’s explosive recovery potential remains limited.

Although recent Middle East crises have caused some transportation disruptions, Chinese automakers are shifting from “chartering ships” to “building ships and controlling logistics,” rapidly expanding their own fleets, achieving autonomous and cost-efficient logistics. Compared to other international automakers, their sales security is stronger. If the crisis duration is short, export transportation will not be significantly affected.

With the full implementation of the national old-for-new policy, market potential for scrapping and upgrading vehicles will gradually release, supporting a steady market recovery in March. The automotive industry’s policy subsidies and structural optimization in 2026 are key to stimulating overall market prosperity and accelerating high-end new energy development. Although the old-for-new subsidy funds decrease by 500 billion yuan to 2.5 trillion yuan compared to 2025, a 1 trillion yuan special fund for fiscal and financial coordination to boost domestic demand—via loan interest subsidies and financing guarantees—can reduce consumer and automaker financing costs, effectively stimulating endogenous consumption and expanding domestic demand.

3. The Automotive Industry as a New Consumption Infrastructure, Significance of Sales Growth

Under the dual waves of industrial upgrading and technological transformation, “automobiles” have transcended traditional transportation tools, becoming a core pillar of high-quality manufacturing, driving consumption, connecting smart ecosystems, and promoting energy revolution. Its core value lies in supporting manufacturing, empowering intelligent consumption, and facilitating energy transition—making the automotive industry a vital growth engine for the new era’s economy. Over the next 5-10 years, the entire automotive consumption market is expected to surpass 10 trillion yuan, with used cars, aftermarket services, and EV supporting services as main growth drivers. Data shows that in 2025, China’s automotive industry output exceeded 11 trillion yuan, nearly 10% of the national manufacturing total, directly driving over 20 trillion yuan in upstream and downstream industries, employing over 8 million directly and over 30 million indirectly, ranking first in manufacturing scale and impact.

With the development of intelligent electric vehicles, private cars are increasingly seen as a third space in personal life, replacing real estate as a new growth point for household consumption. Similar to how buying a house leads to home appliances and renovations, owning a private car creates a new mobile “home,” forming a new mobility and consumption ecosystem. Boosting car sales is akin to building new infrastructure for consumers’ third space, making the increase in car sales highly significant.

4. China’s Share of the Global Automotive Market Reached 33% in January 2026

In 2025, global car sales reached 96.89 million units, up 6% YoY. In January 2026, global sales were 7.18 million units, up 1% YoY. As the Chinese and US markets slow, global growth in January 2026 also decelerates. China’s automotive market trend remains positive; since 2020, China’s share of the world market has steadily increased, reaching 33.8% in 2023, 34.2% in 2024, and 35.4% in 2025. In January 2026, China’s share was 32.7%, stable overall.

The overseas environment for Chinese brands’ expansion is favorable: January 2026, India’s market grew 11%, Vietnam 77%, Russia 53% (on low base), Thailand 43%, Malaysia 27%, with some markets in South America performing well.

From the overall group performance, a pattern of “rising in the East, declining in the West” is evident. Chinese brands are increasing their global share, while international top brands’ shares decline significantly. Among the top 10 global automakers in 2026, three Chinese companies—Geely (6th), Chery (8th), BYD (10th)—are rising strongly. Apart from temporary strength in the US market and favorable factors in India like Suzuki, other international brands are experiencing substantial share declines.

5. Chinese Autonomous New Energy Vehicle Exports Account for 28% of the World Market in January 2026

In 2025, global vehicle sales reached 96.89 million units, with new energy vehicles at 22.89 million. In January 2026, global sales were 7.18 million units, with new energy vehicles at 1.42 million. The share of new energy vehicles in January 2026 was 19.7%, with pure electric at 13.3% and plug-in hybrid at 6.4%, showing excellent performance.

In 2025, US new energy vehicle sales were 1.72 million, with a growth rate of -2%. Due to high tariffs and the cancellation of subsidies, January 2026 US EV sales dropped 34% YoY to 82,000 units. European EV sales in 2025 reached 3.86 million, up 33% from 2024, with a net increase of 960,000 units. Preliminary data shows January 2026 European EV sales at 269,000 units, up 13% YoY.

China’s new energy vehicle share in the global market reached 62.8% in January 2026. In 2025, Chinese autonomous new energy vehicle exports accounted for 15.8% of the overseas market, with significant growth. In January 2026, this share increased to 28.3%, a 7.5 percentage point rise from December. Due to strong export performance and the US market’s demand contraction from subsidy cancellations, Chinese autonomous new energy vehicle exports have expanded significantly.

Source: CAAM

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