China's NEV Sales Decline Amid Market Pressures

• •NEV retail sales in China expected to drop 16.5% year-on-year in October 2026.
• •Overall passenger car sales forecasted to decline by 28.9% year-on-year.
• •NEV penetration rate remains high at 66.9%, but shows a slight decrease from September.

In October 2026, China's new energy vehicle (NEV) retail sales are projected to reach 1.07 million, a 16.5% decrease year-on-year, according to the China Passenger Car Association (CPCA). Overall passenger car sales are expected to total 1.6 million, down 28.9% year-on-year. The NEV penetration rate remains high at 66.9%, but shows a slight decline from September's record of 67%. The automotive market is experiencing significant pressure due to high oil prices and weak household income expectations. Sales of traditional combustion-engine vehicles have also dropped sharply, contributing to the overall downturn. The CPCA noted that showroom traffic increased during the National Day holiday but quickly fell afterward, indicating a lack of sustained demand. This marks the ninth consecutive monthly decline in NEV sales, reflecting ongoing challenges in the broader auto market.