China NEV Sales February 2026 Decline as Exports Surge

China NEV sales February 2026 recorded their first year-on-year decline in nearly two years, reflecting weaker domestic demand following the removal of purchase tax exemptions and the traditional seasonal slowdown in the automotive market. According to data released by the China Association of Automobile Manufacturers, wholesale sales of new energy vehicles totaled 765,000 units during the month, showing a clear contraction from both the previous month and the same period last year.

China NEV Sales February 2026 Show Market Slowdown

The wholesale volume of new energy vehicles, which includes domestic deliveries and exports, reached 765,000 units in February. This represented a 14.2% decline compared with the same month last year and a 19.05% decrease from January. The figures mark the first year-on-year contraction in the sector since March 2024, highlighting the impact of both seasonal factors and policy adjustments affecting vehicle purchases in China.

Domestic Demand Weakens After Tax Policy Changes

The most significant decline came from the domestic market, where sales dropped sharply. Domestic NEV deliveries reached only 483,000 units in February, representing a 36.5% year-on-year fall and a 24.9% drop from January. The downturn reflects both the typical early-year slowdown in automotive purchasing and policy changes that altered the cost structure for buyers entering 2026.

Previously, buyers of new energy vehicles benefited from a full exemption on the vehicle purchase tax, which carries a statutory rate of 10%. Beginning in 2026, however, consumers are now required to pay a 5% purchase tax. The policy adjustment has introduced a transition phase for the market, creating short-term pressure on domestic demand as consumers and manufacturers adapt to the new regulatory environment.

Exports Provide Strong Support for Chinese Automakers

While domestic demand weakened, overseas markets continued to provide strong growth momentum for Chinese automakers. In February, NEV exports reached 282,000 units, representing an impressive 115.3% increase compared with the same month last year. Although exports declined slightly by 6.6% from January, the strong year-on-year expansion highlights the growing international presence of Chinese electric vehicle manufacturers.

Overall Auto Market and NEV Penetration

The broader Chinese automotive market also experienced contraction during the month. Total wholesale vehicle sales across all powertrain types reached 1.805 million units, down 15.2% year-on-year and 23.1% month-on-month. However, exports across the entire auto sector remained strong, totaling 672,000 units and growing 52.4% compared with the previous year despite a minor monthly decline of 1.4%.

Despite the overall slowdown in sales volume, the share of new energy vehicles in China’s automotive market continued to expand. NEVs accounted for 42.4% of total vehicle sales in February, slightly higher than the 41.9% penetration recorded during the same period last year and above the 40.3% share observed in January. This indicates that electrification momentum remains structurally strong even during periods of market adjustment.

Performance of BEV and PHEV Segments

The NEV category includes battery electric vehicles, plug-in hybrid electric vehicles, and fuel-cell vehicles. Battery electric vehicles recorded wholesale sales of 484,000 units in February, declining 10.9% year-on-year and 18.93% month-on-month. However, BEV exports performed strongly, reaching 174,000 units and increasing by 120% compared with the previous year despite a monthly decline of 13.7%.

Plug-in hybrid vehicles showed a similar trend in domestic demand but strong export growth. PHEV sales totaled 280,000 units in February, falling 19.4% year-on-year and 19.54% month-on-month. In contrast, PHEV exports reached 107,000 units, more than doubling with a 110% year-on-year increase and even rising 7.8% compared with January, demonstrating the continued international demand for electrified powertrain technologies from Chinese manufacturers.