Sinolink Securities Co., Ltd. has released a research report indicating that the second half of the year will see ample subsidy funding and a balanced distribution pace, coinciding with the peak car-buying season. With numerous heavyweight new models slated for release by various automakers, the market will feature an increase in pure electric new cars, enhanced charging efficiency, diversified vehicle categories, and innovative usage scenarios. This supply-side diversification is expected to stimulate car demand.

The firm holds a bullish outlook on the automotive sector's recovery in H2, driven by sustained high growth in exports, improving domestic demand, and a turning point in intelligent driving technology.

Outlook for Passenger Vehicle Industry in H2 2026: Domestic Sales Recovery, Sustained Export Surge, and Accelerated Premiumization

1) Domestic sales: With sufficient and evenly distributed subsidy funds in H2, coupled with the arrival of the peak buying season and a wave of significant new product launches, the market will exhibit characteristics of increased pure EV offerings, better charging solutions, richer product categories, and innovative use cases. This supply diversification is likely to generate demand. Sinolink Securities Co., Ltd. projects H2 overall retail sales and new energy vehicle (NEV) retail sales to decline 12% and grow 4% year-on-year, respectively. This translates to full-year retail sales of 19.34 million units and NEV retail sales of 11.92 million units, down 15% and 4% year-on-year, respectively.

2) Premium vehicles: The market for vehicles priced above 400,000 yuan significantly outpaced the broader market in H1. With numerous new models expected in H2 and a long-term trend of consumption upgrades driven by replacement demand resonating with the supply of high-quality new domestic models, the premium segment holds substantial growth potential. Domestic automakers are well-positioned to accelerate their substitution of joint-venture market share through differentiated advantages.

3) Exports: Export growth continued to exceed expectations in H1, with notable structural improvements, including a higher share of NEVs, an increased proportion of exports to high-potential markets like Europe, and accelerated exports of premium vehicles. Looking ahead to H2, the synergy of products, production capacity, and sales channels is expected to sustain high export growth. The firm forecasts full-year total exports and NEV exports to reach 9.6 million and 5.12 million units, respectively, representing year-on-year growth of 68% and 117%. Structural optimization, scale effect realization, and the commencement of localized production are anticipated to enhance export profitability.

4) Wholesale: With continuous improvement in domestic sales and robust export growth, Sinolink Securities Co., Ltd. expects H2 overall wholesale and NEV wholesale volumes to change by -1% and +18% year-on-year. This leads to full-year projections of 28.58 million units for total wholesale and 17.16 million units for NEV wholesale, down 3% and up 13% year-on-year, respectively.

Intelligent Driving on the Cusp of a Breakthrough, Smart Cockpits Entering the Era of Proactive Service

1) Technological progress: Continuous advancements in intelligent driving technology, accelerated model optimization, and iterative paradigm shifts are paving the way. High-computing-power self-developed chips are being integrated into vehicles, with collaborative design across chip architecture, model algorithms, and compilers expected to enhance the intelligent driving experience.

2) Inflection point approaching: Leading automakers are nearing a 50% share of miles driven using intelligent driving features, and top players are expected to achieve a Mean Price per Intervention (MPI) reaching the thousand-kilometer level this year.

3) Business model validation: The commercial viability of intelligent driving is increasingly being proven. FSD subscription numbers are growing rapidly, with over 55% of delivered vehicles in North America adopting FSD subscriptions in Q2. Consumers show strong willingness to pay, suggesting a viable business model for intelligent driving.

4) FSD entry into China: The potential entry of FSD into the Chinese market could generate significant spillover effects and a "catfish effect," raising consumer awareness and accelerating industry progress.

5) Smart cockpits: AI agents are being deployed in vehicles and evolving towards full-vehicle intelligence, delivering a more proactive, intelligent, and actionable cockpit experience. Leading manufacturers are successively launching on-board agent solutions, with capabilities in fuzzy intent understanding and multi-task planning execution becoming standard features in premium intelligent cockpits.