China NEV Retail Sales Ease 2% in July, Penetration Climbs to 64.4%

Passenger vehicle retail sales in China totaled 1.506 million units in July 2026, down 18% year-on-year and 8.8% from June, according to the latest data released by CPCA.

During the first seven months of the year, cumulative passenger vehicle retail sales reached 10.207 million units, down 20% year-on-year, indicating that end-market demand remained under significant pressure.

Weekly sales trends showed a clear “low-to-high” pattern throughout July.

Average daily retail sales stood at just 34,000 units during the first week of the month before gradually recovering, reaching 77,000 units per day in the final week.

However, retail performance remained weak for the month as a whole after automakers pulled forward demand through aggressive mid-year promotions in June, followed by the traditional seasonal slowdown in July.

The wholesale market proved relatively more resilient. Passenger vehicle wholesale deliveries totaled 2.241 million units in July, up 1% year-on-year but down 5% from June.

Cumulative wholesale volume for the first seven months reached 14.788 million units, down 5% year-on-year.

Compared with the overall passenger vehicle retail market’s 18% year-on-year decline, the new energy vehicle segment remained comparatively resilient.

Retail sales of new energy passenger vehicles reached 970,000 units in July, down 2% year-on-year and 4% from June. The retail penetration rate rose to 64.4%.

The wholesale market continued to expand. New energy passenger vehicle wholesale volume reached 1.463 million units in July, up 24% year-on-year and down just 1% month-on-month. Wholesale penetration climbed to 65.3%.

Since the beginning of the year, cumulative new energy passenger vehicle wholesale volume reached 8.251 million units, up 8% year-on-year, while cumulative retail sales totaled 5.675 million units, down 12%.

Despite the decline in retail sales, the segment continued to outperform the broader passenger vehicle market.

On the production side, output of conventional gasoline-powered light vehicles totaled 422,000 units during the first five weeks of July, down 54% year-on-year and 13% from the same period of the previous month.

Production of hybrid electric vehicles (HEVs) and plug-in hybrid electric vehicles (PHEVs) reached 371,000 units, down 18% year-on-year and flat month-on-month.

This further highlights the widening divergence between new energy vehicles and conventional internal combustion engine vehicles.

Overall, seasonal weakness, demand pulled forward by June promotions and a high comparison base from a year earlier remained the primary factors weighing on July market performance.

On the wholesale side, many automakers launched new models during July to maintain production schedules, while vehicle exports remained robust.

Strong overseas demand helped absorb domestic production capacity and provided continued support for wholesale deliveries.

The CPCA said these positive factors remain largely structural in nature and are insufficient to reverse the overall weakness in domestic passenger vehicle demand in the near term.