• Domestic NEV sales plunge over 36% year-on-year, dragged by the traditional low season and additional purchase tax costs.
• NEV exports surge 115.3% year-on-year, serving as a key engine supporting the broader market.

Hit by the traditional off-season for auto sales and the phasing out of purchase tax incentives, China's wholesale sales of new energy-vehicles (NEVs) in February recorded their first year-on-year decline in nearly two years, with robust overseas demand serving as the sole bright spot to cushion the drop.

China's wholesale NEV sales — which include both domestic deliveries and exports — stood at 765,000 units in February, down 14.2% year-on-year and down 19.05% month-on-month, according to data released Wednesday by the China Association of Automobile Manufacturers (CAAM). This marks the first year-on-year contraction for the gauge since March 2024.

Weakness in the domestic market was the primary drag on overall volume. China's domestic NEV sales in February were just 483,000 units, plunging 36.5% from a year earlier and dropping 24.9% from January.

The significant decline was not only constrained by the traditional lull in the auto market at the beginning of the year, but also reflected the growing pains brought by policy shifts.

Entering 2026, Chinese NEV buyers are subject to a 5% vehicle purchase tax, whereas the levy (which has a statutory rate of 10%) was previously fully exempted.

Exports remain robust

As domestic demand cools, the overseas expansion of Chinese automakers remains rapid. In February, NEV exports reached 282,000 units, surging 115.3% year-on-year, despite a slight month-on-month pullback of 6.6%.

Looking at the broader auto market, wholesale sales of all vehicles totaled 1.805 million units in February, down 15.2% year-on-year and 23.1% month-on-month.

Among them, total auto exports reached 672,000 units, up 52.4% year-on-year, with a marginal month-on-month dip of 1.4%.

Notably, despite the overall sales decline, the market share of NEVs continues to expand. In February, the NEV penetration rate reached 42.4%, higher than the 41.9% recorded in the same period last year and the 40.3% seen in January.

Segment performance breakdown

The wholesale NEV sales reported by CAAM encompass battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), and fuel-cell vehicles.

Wholesale BEV sales in February stood at 484,000 units, down 10.9% year-on-year and 18.93% month-on-month.

However, BEV exports showed strong performance, reaching 174,000 units — a 120% year-on-year surge despite a 13.7% month-on-month decline.

PHEV sales in February were 280,000 units, down 19.4% year-on-year and 19.54% month-on-month.

PHEV exports also doubled, reaching 107,000 units, up 110% year-on-year, and bucked the broader monthly trend with a 7.8% month-on-month increase.