China NEV Exports Surge 148% in July, Offset Weak Domestic Demand

On August 11, the China Passenger Car Association (CPCA) released its analysis of China’s passenger vehicle market for July 2026.

According to the report, the market in July was marked by sluggish domestic demand, robust export growth and divergent performance across the new energy vehicle (NEV) segment.

Growth drivers of the auto industry are shifting further toward new energy vehicles and overseas markets.

Domestic Retail Market Weakens as NEV Penetration Hits 65%

Data from the CPCA showed that China’s passenger vehicle retail sales totaled 1.461 million units in July 2026, down 20.9% year on year and 8.8% month on month.

From January to July, cumulative retail sales reached 10.173 million units, down 20.3% from a year earlier.

New energy passenger vehicles remained relatively resilient despite the broader market downturn.

NEV retail sales reached 951,000 units in July, down 3.9% year on year, while cumulative sales in the first seven months totaled 5.668 million units, declining 12.5% year on year.

NEVs accounted for 65.1% of passenger vehicle retail sales in July, up 11.6 percentage points from the same period last year and 2.1 percentage points higher than in June.

By contrast, conventional fuel vehicles continued to face significant pressure. Retail sales of traditional fuel-powered passenger cars fell to 510,000 units in July, down 41% year on year. Pure internal combustion engine vehicles declined 44%, while conventional hybrid models decreased 4%.

By brand category, Chinese automakers recorded retail sales of 1.04 million units in July, down 14% year on year.

Mainstream joint venture brands sold 290,000 units, down 35%, while luxury brands delivered 130,000 units, down 27%.

Domestic brands continued to expand their advantage through electrification, while traditional joint venture brands faced increasing market pressure.

The top five automakers by domestic NEV retail sales in July were BYD with 223,500 units, Geely Auto with 105,500 units, Leapmotor with 83,700 units, Changan Automobile with 59,900 units and SAIC-GM-Wuling with 49,000 units.

Exports Become Key Growth Driver for Automakers

In contrast to weak domestic demand, China’s passenger vehicle exports continued to maintain strong momentum in July.

According to CPCA data, passenger vehicle exports, including complete vehicles and CKD kits, reached 918,000 units in July, up 87.8% year on year and 4.9% month on month. Export sales accounted for 41% of automakers’ total passenger vehicle sales.

New energy vehicle exports expanded even faster. NEV exports reached 540,000 units in July, surging 147.8% year on year and accounting for 58.8% of total passenger vehicle exports, up 14 percentage points from a year earlier.

During the first seven months of 2026, cumulative NEV exports from passenger vehicle manufacturers reached 2.771 million units, increasing 128.5% year on year.

From an export product perspective, BEVs remained dominant, accounting for 59.5% of NEV exports in July. PHEVs and EREVs accounted for 35.9% and 4.6%, respectively.

The leading exporters of NEVs in July were BYD with 173,700 units, Chery Automobile with 82,800 units, Tesla China with 66,300 units, Geely Auto with 60,600 units and Changan Automobile with 26,200 units.

Some automakers are also accelerating overseas localization through CKD (completely knocked down) assembly operations.

Data showed that CKD exports accounted for 44.7% of Great Wall Motor’s overseas shipments, 37.2% for SAIC-GM-Wuling and 40% for Lingtu Automobile.

NEV Production and Wholesale Sales Maintain Growth

On the production side, China produced 2.222 million passenger vehicles in July, down 1.6% year on year and 4.9% month on month.

NEV production continued to expand, reaching 1.449 million units in July, up 25.6% year on year and 0.2% month on month.

From January to July, cumulative NEV production reached 8.214 million units, up 7.9% year on year.

Wholesale data showed that passenger vehicle manufacturers sold 2.252 million units in July, down 0.2% year on year and 4.5% month on month.

Driven by strong export growth, wholesale sales performed significantly better than domestic retail sales, with the gap between the two growth rates reaching 20.7 percentage points.

NEV wholesale sales totaled 1.446 million units in July, up 21.3% year on year and down 2.8% month on month.

Cumulative NEV wholesale sales during the first seven months reached 8.248 million units, increasing 7.9% year on year.

In July’s NEV wholesale structure, battery electric vehicles accounted for 66.2%, plug-in hybrid models for 26.8%, and range-extended vehicles for 6.9%.

By vehicle segment, the mid-size electric vehicle market continued to expand. Wholesale sales of B-segment EVs reached 299,000 units in July, up 35% year on year, accounting for 31% of the battery electric vehicle market.

Meanwhile, entry-level EVs faced increasing pressure. Wholesale sales of A00-segment EVs fell to 65,000 units in July, down 50% year on year, reducing their market share to 7%.

A0- and A-segment EVs remained larger-volume categories, accounting for 32% and 24% of the BEV market, respectively.

The top five NEV manufacturers by wholesale sales in July were BYD with 410,600 units, Geely with 156,600 units, Chery with 122,100 units, Leapmotor with 101,300 units and Tesla China with 93,600 units.

Inventory Reduction Trend Continues

Inventory pressure across the auto industry continued to ease in July as automakers adopted more cautious production and sales strategies.

Data showed that manufacturers’ wholesale sales exceeded production by 30,000 units in July, while domestic wholesale sales were 127,000 units lower than domestic retail sales.

Since the beginning of the year, the passenger vehicle industry has continued to reduce inventory levels.

From January to July, overall industry inventory declined by 640,000 units, as automakers lowered production, expanded exports and adjusted product structures to reduce inventory pressure.

Looking ahead, the CPCA expects the passenger vehicle market to remain in a recovery phase after adjustment in August.

With consumer-related policies gradually taking effect and changes in the comparison base from last year, the year-on-year decline in passenger vehicle sales is expected to narrow gradually.