China’s market for traditional fuel passenger vehicles continued to contract sharply in May, with domestic sales falling 41.8% year-on-year to 497,000 units, according to data released by the China Association of Automobile Manufacturers (CAAM). This represents a decline of 357,000 vehicles compared to May 2025 and a 3.5% drop from April 2026.
Overall domestic passenger vehicle sales reached 1.444 million units in May, an 8.2% increase from April but still down 23.4% compared to the same month last year. The steeper retreat in gasoline-powered vehicle sales has accelerated the shift toward new energy vehicles (NEVs) in the Chinese market.
In the first five months of 2026, cumulative sales of traditional fuel passenger cars totaled 3.2 million units, a 28% decline from the 4.443 million sold in the same period last year. Total passenger vehicle sales for January through May stood at 6.79 million units, down 23.8% year-on-year.
By contrast, the NEV segment showed signs of stabilization. Domestic NEV sales in May reached 1.049 million units, up 14.8% from April, though still 4.1% below year-ago levels. Passenger NEV sales specifically were 947,000 units, reflecting a 15.6% month-on-month increase but an 8.1% decline from May 2025. CAAM cited policy adjustments, shifts in market structure and broader economic pressures as factors contributing to year-on-year declines in the domestic market.
Exports have become a critical growth driver for automakers. China shipped 446,000 NEVs abroad in May, a 3.8% month-on-month increase and a 110% rise from May 2025. Exports of traditional fuel vehicles also climbed, reaching 483,000 units, up 42.6% year-on-year. In the January–May period, NEV exports totaled 1.833 million units (up 110%), while traditional fuel vehicle exports reached 2.227 million units (up 36.2%).
Reflecting the domestic trend away from combustion vehicles, pure gasoline models were absent from China’s top ten passenger vehicle retail sales list in May, which was entirely composed of NEVs. Geely’s Xingyuan led retail sales for the month, followed by the Model Y.
Source: CnEVPost
