December 2025 Passenger Car Market Deepens Divide: NEV Wholesale Soars, Retail Slumps Amid Policy Rollback

Cui Dongshu, Secretary-General of the China Passenger Car Association (CPCA), noted that China's passenger vehicle market showed clear divergence in December 2025. For the full year, wholesale sales of passenger vehicles rose by 9% year-over-year, with new energy vehicle (NEV) wholesale volumes surging by 25%, successfully meeting the growth targets set under the 14th Five-Year Plan. However, the anticipated year-end buying surge failed to materialize as expected, primarily due to the expiration of the NEV purchase tax exemption policy at year-end and the exhaustion of government subsidies for trade-in programs in most provinces and cities. Retail sales of passenger vehicles in December plunged by 14% year-over-year, significantly underperforming wholesale figures. Within specific segments, retail demand for A00-class sedans and budget MPVs remained weak, while A0-class sedans and C-segment SUVs emerged as key sales drivers, with mid-to-high-end SUVs showing relatively robust performance. The weakening retail performance was largely attributed to the offsetting effect of reduced policy-driven incentives following recent adjustments.