High New Energy Penetration Fails to Mask Industry's Low-Profit Dilemma

[Market Watch] New energy vehicle (NEV) retail penetration has reached 61.4%, yet the industry’s profit margin has plummeted to 3.2%.

Core Trend: Sharp Divergence Between High Sales Volume and Low Profitability

The NEV retail penetration rate of 61.4% stands in stark contrast to the industry’s overall profit margin of just 3.2%, painting a picture of deep fragmentation. Wang Hui, Vice President of Avatr Technology, stated bluntly: “Sales without profit are fake sales.”

Key Data: Profit Margins Have Declined for Three Consecutive Years, Nearing Break-Even Levels

From Q1 2024 to Q1 2026, the automotive industry’s profit margin fell from 4.3% to 4.1%, and further down to 3.2%—significantly below the national industrial average and approaching the break-even point for most automakers.

Strategic Foundation: Scale Growth Driven by Price Wars Is Unsustainable

Although domestic brands hold 80% of the domestic market share, the new energy segment as a whole remains largely unprofitable, highlighting the unsustainability of the “volume-over-price” strategy. The industry urgently needs to shift its focus from “getting bigger” to “getting stronger.”