In July 2026, China's passenger car retail sales reached 1.506 million units, down 18% YoY; NEV retail was 970,000 units with a 64.4% penetration rate. The dealer inventory factor stood at 1.48, down 6.3% MoM. CPCA expects August to show "weak total recovery with strong structural divergence"; notably, no new ICE models launched in July while 25 new range-extended models dominated.
Total Volume: Retail Under Pressure, Wholesale Edges Up
Per CPCA data (cited in Guoyuan and Aijian Securities reports), China's passenger car retail sales in July 2026 reached 1.506 million units, down 18% YoY and 6% MoM; year-to-date retail stands at 10.207 million, down 20%.
Wholesale was relatively stable: July factory wholesale was 2.241 million units, up 1% YoY and down 5% MoM; cumulative wholesale reached 14.788 million, down 5%.
Structure: 64.4% NEV Penetration, EREVs Dominate New Launches
July NEV retail was 970,000 units, down 2% YoY and 4% MoM, with cumulative retail of 5.675 million; NEV retail penetration hit 64.4%. NEV wholesale was much stronger at 1.463 million units, up 24% YoY.
The new-model supply structure saw a landmark shift. CPCA's Cui Dongshu noted:
No new ICE models launched in July;
25 new EREV models, 15 more than a year earlier, dominated the launch calendar;
The industry's competitive logic is shifting from "build it first" to "built to last."
Channel: Inventory Factor 1.48, ~2.2M Units in the Pipeline
According to the China Automobile Dealers Association, the July dealer inventory coefficient was 1.48, down 6.3% MoM and up 9.6% YoY, with channel inventory of roughly 2.2 million units — reflecting weak off-season end demand.
Major automakers' July sales (compiled by Aijian Securities):
Automaker | July sales (units) | YoY |
|---|---|---|
BYD | 419,211 | +22% |
Chery Group | 276,820 | +23% |
Geely (incl. Zeekr) | 250,161 | +5% |
Leapmotor | 101,267 | +102% |
HIMA | 45,046 | -6% |
XPeng | 38,027 | +4% |
NIO | 35,934 | +71% |
Zeekr | 35,837 | +111% |
Li Auto | 30,468 | -1% |
Xiaomi Auto | 30,000+ | — |
Outlook: "Weak Total Recovery, Strong Structural Divergence" in August
The CPCA said on August 11 that August's passenger car market shows "weak total recovery with strong structural divergence." With the Strait of Hormuz disruptions pushing up international oil prices, domestic fuel prices rose nearly RMB 985/tonne across two adjustments in July — sharply raising ICE ownership costs, suppressing ICE purchase intent and serving as a key external tailwind for NEVs.
Exports remain a pillar: per CAAM data, June auto exports reached 1.037 million units, up 75.2% YoY, including 523,000 NEVs, up 155.1%.
Bottom Line
July showed a classic off-season pattern of "weak totals, strong structure": double-digit retail decline, but NEV penetration holding above 64%, accelerating EREV/NEV supply and booming exports providing a floor. The industry now looks to the "Golden September, Silver October" peak for a real test. Follow EX1000.COM for monthly auto market analysis.
