The research report released by CITIC Construction Investment highlights that the electric two-wheeled vehicle industry is on the verge of concluding its profound adjustment phase, with signs indicating that the nadir of profitability may have already been reached. This transformation is being propelled by mergers and acquisitions, steering the industry towards a new era of consolidation.

Subject to the combined effects of a diminishing high base effect, the transition to new national standards, and the gradual withdrawal of national subsidies, domestic electric two-wheeled vehicle sales are anticipated to experience a year-on-year decline in the first half of 2026. For the entire year, domestic sales could potentially see a reduction of 5% to 8%. Nevertheless, a rebound in demand is expected post the adaptation period to the new national standards in 2027.

The industry concentration ratio, CR3, remains elevated, with new entrants steadily gaining market share. Notably, electric motorcycles have emerged as a pivotal growth sector. Despite an overall downturn in profits among six listed companies, a turning point towards recovery became evident in the second quarter. New entrants demonstrated the swiftest recovery, trailed by leading enterprises, while second-tier companies exhibited a relatively slower pace of improvement.