China’s passenger vehicle sales will hit their lowest point of 2026 in February as an extended New Year holiday shortens production time, according to the China Passenger Car Association.
CPCA said that February will deliver the “year’s absolute trough” in terms of vehicle sales, although it expects exports to grow in the future.
The nine-day holiday — the longest on record — leaves just 16 working days this month, three fewer than February 2025.
Most automakers will take extended breaks before and after the festival, creating what CPCA called a shortage of “effective production and sales time.”
The association said the sales trough may help relieve retail inventory pressure.
Due to official launches being mostly planned for the post-holiday period, the organization stated that this month might experience “short-term volatility in both orders and deliveries”, despite the intensive pre-debut offers.
According to CPCA, even though the period before the Chinese New Year is typically “prime time for first-time buyers”, their share has been decreasing to below 40% throughout the last few years, providing the example of 2025, in which 13.19 million vehicles were scrapped or transferred, and 13 million were purchased.
While Chinese consumers hold significant savings in medium- and long-term deposits, weak property and stock markets are discouraging spending, weighing on pre-holiday vehicle demand.
Last month, the nation saw its wholesale figures decline 6.2% year over year to 1.973 million units.
CPCA notes that cheaper EVs could benefit from the typical back-to-school car-buying rush after Chinese New Year, while rapid post-holiday workforce returns and older migrant workers taking local jobs may support the broader market.
Rising copper and lithium prices — driven by AI power storage demand and sustained NEV growth — are currently limiting automakers’ ability to offer post-holiday discounts, which may suppress short-term demand, as explained by the association.
However, price stabilization should “reduce wait-and-see” consumer behavior over time.
Following new tariff negotiations with the European Union and Canada, CPCA highlights that NEV exports from China are “evolving from ‘simply selling cars’ to ‘industrial chain going overseas’, which will result in their future growth, “expected to transition from high-volume growth to qualitative improvement.”
January 2026 Wholesales
China’s wholesale figures — which include domestic sales and exports — reached 1.973 million units in January, down 6.2% year-over-year.
Retail sales totaled 1.544 million units, a 13.9% decline from January 2025.
Taking these numbers into consideration, BYD was the best-selling NEV brand in the country last month, with 205,518 vehicles sold, due to its “dual BEV-PHEV [battery electric and plug-in hybrid vehicle] drive.”
The Chinese giant was followed by Geely in second place, which listed 124,252 units, while Tesla China rounded out the top three, retail-selling and exporting 69,129 EVs.
Looking at domestic sales, internal combustion engine (ICE) vehicles accounted for 948,000 registrations — a 10% year-on-year decrease, while NEVs reached 596,000 units, representing a 20.0% drop compared to January 2025.
Specifically in this segment, both BEV and PHEV retail sales declined year over year: 17.0% and 31.2%, respectively.
The best-selling model in China’s market last month was the Xiaomi YU7, which reached 37,869 units.
The Geely Boyue L achieved second place with 34,176 vehicles sold domestically, while its Geome Xingyuan model placed third, with 29,007 vehicles.
Meanwhile, Chinese exports hit a record of 576,000 units last month, jumping 52.0% from January 2025.
According to CPCA, this showed “continuously improving competitiveness of China’s auto industry globally and sustained strong overseas demand.”
Internal combustion engine (ICE) vehicles increased by around 20% to 290,000 deliveries, while NEVs reached 286,000 exports, doubling year-over-year and representing nearly half (49.7%) of all vehicles shipped from the country.
Of this segment’s sales overseas, BEVs accounted for 65% — a 2% decrease from January 2025. PHEV exports rose 1% year-on-year to 33%.
BYD was the strongest exporter, with 96,859 units sold overseas. It was followed by Tesla, which shipped 50,644 EVs from China, and by Geely, which exported 32,117 vehicles.
Latest Tariff Agreements
After high tariffs were imposed on Chinese-produced EVs in the last couple of years, the world’s largest automotive market has made positive progress on these duties with other countries and regions in the past few weeks.
On Wednesday, the EU agreed to lift the import tariffs applied to Volkswagen China (Anhui)’s fully electric Cupra Tavascan SUV.
China’s Ministry of Commerce saying more automakers are expected to secure similar price commitment deals.
Last month, China and Canada reached an agreement on EV tariffs that Beijing said does not target any third party, following threats of retaliation from the US.
