June Passenger Car Retail Sales Drop 23.2% YoY, NEV Penetration Hits 62.8%

In June, national passenger vehicle retail sales totaled 1.602 million units, down 23.2% year-over-year (YoY) but up 6.1% month-over-month (MoM). Among these, retail sales of internal combustion engine (ICE) vehicles declined by 39% YoY, with pure ICE vehicles dropping by 42%. Meanwhile, new energy vehicle (NEV) retail sales reached 1.007 million units, down 9.4% YoY, with their market penetration rate rising to 62.8%—an increase of 9.5 percentage points compared to the same period last year. Domestic brands recorded retail sales of 1.1 million units in June, capturing a market share of 68.6%, up 4.5 percentage points YoY. However, their overall retail volume decreased by 18% YoY, and their NEV segment saw a 11% YoY decline in retail sales. Wholesale sales of A00-class battery electric vehicles (BEVs) amounted to 77,000 units, plunging 50% YoY and accounting for only 8% of the total BEV market—a drop of 11.9 percentage points from the same period last year. Mainstream joint-venture brands reported retail sales of 330,000 units in June, down 34% YoY. German brands held a retail market share of 12.8%, down 3.4 percentage points YoY, while Japanese brands accounted for 11.0%, down 1 percentage point YoY. Notably, NEV retail sales from joint ventures surged by 45% YoY, although their domestic NEV retail market share remained low at just 4.3%. The luxury car segment saw retail sales of 170,000 units in June, down 30% YoY, with a market share of 10.3%, down 1.1 percentage points YoY. From a wholesale perspective, NEV wholesale volume reached 1.481 million units in June, up 19.2% YoY. This included 981,000 BEVs (up 26.9% YoY), 406,000 plug-in hybrids (PHEVs, up 18.1% YoY), and 94,000 extended-range electric vehicles (EREVs, down 25.2% YoY). Premium BEVs performed strongly, with B-class BEV wholesale sales reaching 295,000 units, up 37% YoY, representing 30% of the total BEV wholesale market. In terms of exports, China exported 499,000 NEVs in June, surging 152.7% YoY and accounting for 56.9% of total passenger vehicle exports. BYD led with 171,000 units exported in the month, followed by Chery (74,000 units), Geely (62,000 units), and Tesla China (36,000 units). The automotive industry continues to face profit pressure. From January to May 2026, the industry generated revenue of RMB 4,209.6 billion, up 1.4% YoY; costs totaled RMB 3,739.7 billion, up 2.3% YoY; and profits amounted to RMB 144 billion, down 20% YoY, resulting in a net profit margin of just 3.4%. Starting in July, several key policies have taken effect: a new national safety standard for NEVs has been implemented, mandating requirements such as “no fire during thermal runaway” for batteries; and an announcement on vehicle and vessel tax adjustments stipulates that hybrid vehicles will no longer be exempt from this tax beginning in 2027. Additionally, factors such as declining international oil prices, the conclusion of the FIFA World Cup, and the end of the rainy season are expected to gradually unlock pent-up demand in the third quarter.