By Jiahui Huang

Chinese automakers broadly recorded a sharp drop in sales in February as demand in the world's largest auto industry waned during the Lunar New Year month.

Vehicle sales typically slow around the Lunar New Year holiday, but the latest figures also underscore the tough road ahead for Chinese automakers after years of rapid growth and aggressive expansion in the top electric-vehicle market.

BYD, now the world's biggest EV seller, overtaking Tesla, sold a total of 190,190 vehicles in February, down 41% from a year earlier. That included 79,539 fully electric cars, a 36% decline from the previous year.

XPeng, known for its autonomous-driving technology, fared worse, with deliveries falling 50% to 15,256 units. Geely Automobile, China's second-largest EV maker, saw its monthly sales fall 11% to 154,834 units.

Hybrid-vehicle specialist Li Auto sold 26,421 units, 158 more than the same period last year, while Xiaomi, a relatively new entrant, said it sold more than 20,000 EVs in February.

NIO, known for its battery-swapping tech, was the month's standout performer, posting a 58% jump in sales to 20,797 units.

The Chinese car industry entered 2026 facing continued challenges from weaker consumer demand and fierce domestic competition. In January, the country's EV and hybrid sales fell for the first time in almost two years, declining 20% to 596,000 units, according to data from the China Passenger Car Association.

In an encouraging sign, however, the CPCA said at the time that February could mark the trough for auto sales this year, given that the Lunar New Year falls during the month.

Shares of Chinese carmakers were largely lower in Hong Kong on Monday.

Xiaomi led declines, falling 4.8%, while XPeng was down 2.6% and Geely shed 2.3%. NIO's shares were 2.2% lower and Li Auto lost 1.1%.

BYD bucked the declines, rising 3.0%. Its Shenzhen-listed stock rose 4.4%.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

March 01, 2026 22:56 ET (03:56 GMT)

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