April ICE Vehicle Sales Drop 37% YoY as NEV Penetration Surpasses 60%

In April 2026, domestic retail sales of fuel-powered vehicles totaled 530,000 units, down 37% year-on-year, while new energy vehicle (NEV) sales reached 849,000 units, giving NEVs a market penetration rate exceeding 60%. To counter declining sales, fuel-vehicle manufacturers have widely implemented price cuts, offering average discounts of over RMB 20,000 per vehicle. However, these promotions have had limited effect, with foot traffic at dealerships remaining sluggish across many regions. In the first quarter of 2026, fuel-powered vehicle sales fell by 11.9% year-on-year. The primary driver behind this shift is consumers’ growing preference for NEVs, which offer superior driving experiences, advanced intelligent features, and lower operating costs—better aligning with Gen Z and millennial preferences for smart cockpits and autonomous driving capabilities. In contrast, fuel-powered vehicles have lagged in design updates and intelligent features, diminishing their appeal.