From March 1 to 22, China's passenger vehicle retail sales reached 920,000 units, marking a 16% decrease compared to the same period last year. However, sales increased by 19% compared to the previous month. Cumulative retail sales since the beginning of the year totaled 3.498 million units, down 18% year-on-year.
Wholesale sales by passenger vehicle manufacturers during the same period amounted to 1.084 million units, reflecting a 14% decline year-on-year but a significant 62% increase month-on-month. Year-to-date wholesale figures reached 4.578 million units, down 11% compared to the same period last year.
In the new energy vehicle (NEV) segment, retail sales from March 1 to 22 stood at 495,000 units, down 17% year-on-year but up 66% month-on-month. Cumulative NEV retail sales since January reached 1.556 million units, a 23% decrease year-on-year. NEV wholesale sales by manufacturers totaled 543,000 units, down 15% year-on-year but surging 71% compared to the previous month. Year-to-date NEV wholesale sales reached 2.133 million units, down 10% year-on-year.
The NEV retail penetration rate during this period was 53.9%, while the NEV wholesale penetration rate reached 50.1%.
In the first three weeks of March, production of pure fuel-powered light vehicles reached 637,000 units, down 19% year-on-year but up 58% month-on-month. Combined production of hybrid and plug-in hybrid vehicles totaled 245,000 units, down 23% year-on-year but rising 87% compared to the previous month.
Weekly retail sales data showed a gradual recovery. The first week of March saw average daily retail sales of 31,000 units, down 24% year-on-year and 25% month-on-month. The second week recorded average daily sales of 45,000 units, down 19% year-on-year but up 42% month-on-month. The third week reached average daily sales of 51,000 units, down 7% year-on-year but increasing 62% compared to the previous month.
The year 2026 features an extended pre-holiday production period, facilitating February exports. The market entered a typical post-holiday recovery phase, though early March sales remained relatively low due to seasonal factors. Post-holiday demand for conventional fuel vehicles typically slows, contributing to a subdued market in early March. Signs of recovery emerged in the second week.
Rising costs of raw materials, oil, and chips, coupled with intensified competition, have created a complex operating environment for automakers. Geopolitical uncertainties and higher oil prices have negatively impacted fuel vehicle sales. New NEV models are expected to launch throughout the year, potentially boosting market sentiment. However, the transition from product announcement to pre-sales and final delivery involves a time lag, limiting near-term sales impact.
Dealers currently face pressure, with transaction prices remaining stable but failing to meet consumer expectations. Market activity is gradually recovering, though the NEV segment awaits new product launches and clearer market conditions.
Manufacturer wholesale sales also showed improvement in later weeks. The first week saw average daily wholesale sales of 31,000 units, down 32% year-on-year and 14% month-on-month. The second week reached 58,000 units per day, down 10% year-on-year but surging 108% month-on-month. The third week averaged 62,000 units daily, down 3% year-on-year but jumping 126% compared to the previous month.
Early March sales were typically low post-holiday. The growth of direct sales channels for NEVs has helped stabilize market fluctuations. Dealers' inventory replenishment patterns vary significantly within the month, while direct retail sales exhibit smaller swings. Manufacturers' new product launches heavily influence monthly sales rhythms, with consumers and dealers awaiting clearer competitive landscapes before making decisions.
In February, China's total production of power and other batteries reached 142 GWh, up 19% year-on-year. Cumulative production for January-February reached 310 GWh, up 22% year-on-year. Battery installation rates declined, with power battery installation ratio dropping to 19% in February 2026 from 44% in 2025. Ternary battery installation rate was 21%, while lithium iron phosphate battery installation rate stood at 18%.
NEV installations in the domestic market totaled 370,000 units in February, down 47% year-on-year. Battery energy density above 160 Wh/kg accounted for 15% of models in Q1 2026, up from 9% in the same period last year, indicating renewed demand for high-end ternary batteries. Products with energy density below 125 Wh/kg dropped to 0% share.
The competitive landscape among battery manufacturers remains dominated by CATL and BYD, maintaining a combined 68% market share in 2026. Other companies including Gotion High-Tech Co.,Ltd., CALB, Geely Yaoning, and Chuneng New Energy have shown strong performance. BYD's full transition to lithium iron phosphate batteries has strengthened the position of CATL and CALB in the ternary battery segment, with high-end plug-in hybrid models driving ternary battery demand.
China's passenger vehicle inventory stood at 3.33 million units at the end of February, down 240,000 units from the previous month but up 250,000 units from February 2025. Inventory days were estimated at 60 days, indicating improved inventory pressure compared to previous years.
Commercial vehicle sales showed mixed trends. January sales reached 195,000 units, up 19% year-on-year but down 34% month-on-month. February sales fell to 120,000 units, down 47% year-on-year and 36% month-on-month. Cumulative January-February commercial vehicle sales reached 320,000 units, down 20% year-on-year.
NEV penetration in the commercial vehicle segment reached 24% in January-February, up 5 percentage points year-on-year. Truck NEV penetration reached 17%, while bus NEV penetration stood at 53%. Heavy-duty trucks achieved 27% NEV penetration, with significant improvements in high-fuel-consumption logistics vehicles. Electrification of heavy-duty trucks contributes to grid load stabilization through energy storage effects.
