As 2026 dawned, the domestic new energy vehicle (NEV) market encountered a rocky start. According to data released by the China Passenger Car Association (CPCA), between January 1 and 11, nationwide retail sales of passenger cars amounted to 328,000 units. This marked a significant 32% decline year-on-year and a sharp 42% drop month-on-month. Within this figure, retail sales of new energy vehicles were particularly hard-hit, totaling 117,000 units. This represented a substantial 38% decrease year-on-year and a staggering 67% plunge month-on-month. The retail penetration rate for new energy vehicles stood at 35.5%, whereas the wholesale penetration rate was slightly higher at 43.9%.

The primary culprits behind the market's sluggish performance are policy transitions and seasonal factors. However, as local subsidy policies are rolled out and take effect, there is a sense of optimism that the market will gradually regain its footing and embark on a path of recovery.