- China's April NEV retail penetration rate is expected to rise above 60% for the first time, with NEVs rebounding as the broader auto market continues to decline.
- A mild macroeconomic recovery has not immediately translated into a strong rebound in big-ticket consumption.
The China Passenger Car Association (CPCA) expects China's April new energy vehicle (NEV) retail sales to edge up from March, with the penetration rate hitting a new high as internal combustion engine (ICE) vehicles continue to under-perform.
Preliminary estimates show China's April NEV retail sales are expected to reach about 860,000 units, according to a CPCA report on Friday.
The figure represents a slight increase from about 850,000 units in the previous month, but is lower than the 905,000 units recorded a year earlier.
Total passenger car retail sales for April are estimated at about 1.42 million units, representing a month-on-month decline of roughly 13.8%.
This implies that the market penetration rate of passenger NEVs will reach a record level of about 60.6% in April, surpassing the 60% mark on a monthly basis for the first time.
In March, China's passenger car retail sales stood at about 1.65 million units, down 15.0% year-on-year.
Passenger NEV retail sales in March also faced downward pressure, coming in at 852,000 units, which represented a 14.1% year-on-year drop.
For the entire first quarter, passenger car retail sales totaled 4.226 million units, experiencing a 17.4% decline from a year earlier.
Although China's GDP posted a 5% year-on-year growth in the first quarter of 2026, auto retail sales showed a 9.1% year-on-year decline, the CPCA noted.
The mild macroeconomic recovery has not immediately translated into a robust rebound in big-ticket consumption, and upward pressure on oil prices has kept the ICE vehicle market under continuous strain, the CPCA said.
The auto market's sales pace in the first week of April was significantly impacted by the Tomb-Sweeping Day holiday, with average daily retail sales falling back to about 25,000 units.
As average daily retail sales steadily recovered to 38,000 units in the second week, with both year-on-year and month-on-month declines narrowing, market sentiment began to show a mild recovery.
With the intensive release and debut of new models ahead of the Beijing Auto Show, terminal foot traffic and sales orders saw a significant rebound in the third and fourth weeks.
The focus of competition in China's auto market is undergoing a significant shift, further evolving from simple price wars to competition based on product strength, the CPCA said.
The overall Chinese auto market is currently at a critical stage of smooth transition, undergoing a clear shift from being policy-driven to being guided by the market and driven by products, the CPCA noted.
