New Energy Vehicle Market Divergence Intensifies in First Half of 2026

[Market Analysis] Domestic sales of internal combustion engine (ICE) vehicles collapse, with new energy vehicles (NEVs) leading the market and exports jointly driving growth.

Key Trend: Retail Sales Decline While Wholesale Rises, Highlighting Divergence Between Domestic and Overseas Demand

June NEV retail sales reached 1.007 million units, up 6.0% month-over-month but down 9.4% year-over-year; January–June retail sales totaled 4.704 million units, a 14.0% year-over-year decline. In contrast, wholesale volume hit 6.788 million units during the same period, up 5.1% year-over-year, reflecting automakers accelerating shipments to meet export demand.

Key Metrics: Record-High Penetration Rate and Export Volumes

The NEV retail penetration rate remained at a historic high of 62.8%; June exports totaled 499,000 units, with NEVs accounting for 57%. ICE vehicle exports also rose by 33%, creating a dual-growth dynamic for both fuel-powered and electric vehicles.

Strategic Foundation: Accelerated Fuel-to-Electric Transition Puts Pressure on Joint Ventures

High fuel prices combined with shifting consumer preferences caused domestic ICE vehicle retail sales to plummet by 39%. Joint venture brands saw their NEV sales grow 45% year-over-year, yet their ICE segments continue to shrink, illustrating a stark divergence between oil and electric vehicle performance.