In January 2026, China’s new energy vehicle (NEV) retail sales declined for the first time on a year-over-year basis since March 2024, according to data published by the China Passenger Car Association. Retail deliveries reached 596,000 units, down 20% from January 2025 and 55% from December 2025. This shortfall also fell well below the CPCA’s preliminary forecast of 800,000 units.
Several factors contributed to the slowdown, including a typical post-holiday dip in consumer demand and the withdrawal of certain incentives. From the start of 2026, NEV buyers have been subject to a 5% purchase tax, replacing the previous full exemption, and vehicle trade-in subsidies expired at year-end, although an adjusted replacement program is now in transition.
Battery electric vehicles (BEVs) accounted for 348,000 of January’s retail sales, representing a 17% fall year-over-year and a 56% drop month-over-month. BEVs comprised 58.4% of total NEV sales, virtually unchanged from December’s 58.5% share.
Hybrid models—including plug-in hybrid electric vehicles (PHEVs) and extended-range electric vehicles (EREVs)—recorded 248,000 retail sales, down 24% year-over-year and 55% from December.
Breaking down the hybrid segment, PHEV sales reached 172,000 units, or 28.9% of NEV deliveries, marking a 31.2% year-over-year decline (the seventh consecutive monthly drop) and a 58% decrease versus December. EREV deliveries stood at 76,000 units (12.8% of NEV sales), edging up 0.8% year-over-year but down 48% from the previous month.
Total passenger vehicle retail sales—including sedans, SUVs and MPVs—fell 13.9% year-over-year to 1.544 million units, and dipped 32% from December. NEVs accounted for 38.6% of all passenger vehicle sales in January, compared with 41.5% a year earlier and 59.1% in December. Domestic brands achieved a 61.7% NEV penetration rate, while luxury marques stood at 16.1% and mainstream joint ventures at 4.3%.
On the wholesale side, NEV shipments totaled 864,000 units, down 3.3% year-over-year and 45% month-over-month, with a 43.8% NEV penetration rate. Exports of passenger NEVs reached 286,000 units, more than doubling year-over-year and accounting for 49.6% of total passenger vehicle exports. BEVs represented 65% of NEV exports, with entry-level segments (A0 and A00) comprising half of shipments.
Source: CNEV Post
