While NEVs are growing sharply in China’s automotive market, demand in the lower price ranges is shrinking and the shift toward higher-priced vehicles is accelerating. The weak performance of Japanese companies and the moves of emerging players are reshaping the market’s power structure.
In China, domestic new-vehicle sales in August 2026 fell 24% year on year to 1,701,000 units, below the year-earlier level for the 10th consecutive month. While purchases of gasoline-powered vehicles continued to be restrained, NEV sales rose 18% to 1,643,000 units, taking NEVs’ share of all new-vehicle sales above 60%. EV sales rose 28% to 1,161,000 units, while PHV sales fell 1% to 482,000 units.
By price range, low-priced models costing ¥50,000 or less declined sharply, while luxury vehicles priced above ¥400,000 rose 46%. The market share of Chinese domestic brands reached 59%, pushing aside luxury brands from Japan, the United States and Europe. The government’s purchase-tax exemption was extended, but technical standards were tightened, reducing demand in the lower price range. The expansion of the higher price range and contraction of the lower price range are occurring simultaneously.