Domestic Retail Down 32%, Exports Surge 124%! New Energy Vehicles Face Cold Start to Year—Short-term Pain or Trend Inflection Point?

February New Energy Vehicle Production and Sales “Disappointing,” Export Remains the Only Bright Spot

According to the latest data released by the China Passenger Car Association, in terms of production, the output of new energy passenger vehicles in February reached 645,000 units, a year-on-year decrease of 21.3%. From January to February, the total production of new energy passenger vehicles reached 1.585 million units, down 10.1% year-on-year.

Behind the significant decline in production, sales have fallen even more sharply. Data shows that retail sales of new energy passenger vehicles in February were 464,000 units, a decrease of 32% year-on-year; from January to February, retail sales totaled 1.06 million units, down 25.7% year-on-year.

As sales decline, penetration rates are also dropping. In February, the retail penetration rate of new energy vehicles in the domestic passenger car market was 44.9%, down 4 percentage points compared to the same period last year.

New Energy Vehicle Sales Trend from January to February Source: China Association of Automobile Manufacturers Passenger Car Market Information Joint Branch Website

Among various data points for new energy vehicles, exports remain a bright spot. Although exports of new energy passenger vehicles in February decreased by 7% month-on-month, the year-on-year growth was as high as 124.7%. From January to February, cumulative exports of new energy passenger vehicles reached 559,000 units, a year-on-year increase of 114.7%. Behind this doubling, exports of new energy vehicles continue to thrive.

“During January and February this year, the retail sales of new energy passenger vehicles declined significantly year-on-year, mainly due to a ‘growing pain’ caused by multiple short-term factors, not a trend reversal.”

Yang Hongzhi, an automotive industry analyst interviewed by Financial Investment News, said: “The core reason for the data decline lies in the overdraft effect of policy shifts. By the end of 2025, the purchase tax exemption policy for new energy vehicles will end, prompting some consumer demand to be released early last year, creating a ‘market gap’ at the beginning of this year. Additionally, the Chinese New Year was later this year, with the peak sales season concentrated from late January to February, significantly reducing effective sales days and further amplifying year-on-year fluctuations.”

Will market volatility affect the full-year sales forecast? Yang Hongzhi responded: “There may be downward revisions to market expectations, but a year-on-year growth in production and sales in 2026 remains highly probable.”

Liu Menglin, an analyst at Dongguan Securities, also stated that due to factors such as the delayed implementation of local subsidies at the beginning of the year and limited new model supply, terminal demand for automobiles is temporarily under pressure. However, the current restrictive factors are showing signs of marginal improvement.

Liu Menglin pointed out that on the policy side, since mid to late January, various regions have successively launched subsidies for replacing old cars with new ones in 2026. Coupled with the release of the “Guidelines for Compliance in Pricing Behavior in the Automotive Industry” by the State Administration for Market Regulation on February 12 to regulate market pricing order, the industry development environment is further improving.

On the supply side, after the Spring Festival until the auto shows, automakers will intensively launch new models or begin pre-launch promotions. Under the dual influence of favorable policies and new product cycles, domestic auto market demand and sales are expected to stabilize and rebound after the Spring Festival.

| Financial Investment Reporter Lin Ke |