On October 22, the China Passenger Car Association released a weekly analysis of the automotive market. The report states that from October 1 to 19, national retail sales of passenger cars reached 1.128 million units, a year-on-year decrease of 6%, but a 7% increase compared to the same period last month. Year-to-date cumulative retail sales stand at 18.136 million units, an increase of 8% from the previous year. For the same period, sales of new energy vehicles (NEVs) totaled 632,000 units, representing a 5% year-on-year increase and a 2% increase compared to last month, with a retail penetration rate of 56.1% for NEVs. Cumulative retail sales for NEVs this year have reached 9.502 million units, representing a growth of 23%.

Summary of the week: From October 1 to 19, retail sales of passenger cars hit 1.128 million units, a 6% drop from the previous year, but a 7% rise compared to the previous month. Cumulative retail sales year-to-date reached 18.136 million units, an 8% increase compared to the last year. Wholesale sales from manufacturers for the same period reached 1.155 million units, a 5% year-on-year decrease and no change from last month, with year-to-date wholesale reaching 22.002 million units, a 12% increase.

In terms of NEVs: From October 1 to 19, retail sales of NEVs were 632,000 units, increasing by 5% year-on-year and by 2% compared to last month, with a penetration rate of 56.1% and cumulative retail sales of 9.502 million units this year, up 23%. Wholesale of NEVs from manufacturers reached 676,000 units, a 6% year-on-year increase and a 5% increase from last month, with a penetration rate of 58.5% and cumulative wholesale reaching 11.123 million units, up 30% year-on-year.

October retail performance: The average daily retail for the first week of October was 44,000 units, a decrease of 18% year-on-year and down 5% from the previous month. In the second week, the average daily retail reached 85,000 units, a 7% increase year-on-year and a 38% increase from the previous month. In the third week, the average daily retail was 63,000 units, a decrease of 3% year-on-year and down 2% from the previous month.

Starting off October weak, due to an extended holiday, retail sales were impacted by travel during the holiday period, leading to lower retail growth. The government’s vehicle replacement policy initiated in late August boosted sales in September beyond expectations, but manufacturers set low production and sales targets for September, leading to pressure during the month-end surge that affected early October sales, resulting in some negative growth.

As October enters the traditional peak “golden September and silver October” period, tightening of subsidy standards in some regions, along with impending expiration of tax incentives for car purchases, is gradually increasing consumer enthusiasm for buying vehicles.

National wholesale trend analysis: For vehicle manufacturers in the first week of October, average daily wholesale was 30,000 units, a year-on-year decrease of 21% and a 36% decrease from the previous month. The second week saw an average daily wholesale of 76,000 units, down 1% year-on-year but up 15% from the previous month. By the third week, average daily wholesale was 87,000 units, a 1% increase year-on-year, with an 18% increase from the previous month.

From October 1 to 19, wholesale reached 1.155 million units, a 5% year-on-year decline and no growth from last month; cumulative wholesale year-to-date is 22.002 million units, an increase of 12%.

As measures against over-competition deepen, leading car manufacturers are striving to maintain relative market price stability and gradually improve funding within the industry supply chain, yet they still face significant profits pressure, leading to cautious domestic sales strategies from manufacturers following strong performance in September.

Exports have remained robust, with improvements observed in China’s automotive exports since the third quarter, particularly for domestic NEVs in overseas markets. The reduction in inventory pressures for fuel vehicles in Russia has enhanced overall exports, benefiting from the efforts made to expand the market share of Chinese mainstream brands. As exports of plug-in hybrid and conventional vehicles increase, the impact on international brands by the Chinese brands will become more pronounced in line with the historical growth of roughly 20 years in durable consumer goods exports from China.

In 2025, investment in automobiles has grown by 19%, production grew by 11%, and consumption increased by 1%. The government's intensified efforts to implement vehicle replacement policies continue stimulating production needs. Economic indicators remain stable, with strong growth in NEVs and positive results in high-quality development. In September, retail sales of consumer goods reached 4.197 trillion yuan, a 3.0% year-on-year increase, with automotive consumption at 471.1 billion yuan, up 2%.

From January to September, the total retail sales of consumer goods reached 36.587 trillion yuan, a growth of 4.5%, with automotive consumption amounting to 3.5923 trillion yuan, up 1%. Automotive production in September was 3.23 million units, up 14% year-on-year, where NEVs totaled 1.58 million units, marking a 20% increase with a penetration rate of 49%. Fuel vehicle production stood at 1.65 million units, an 8% increase.

From January to September, total automotive production was 24.05 million units, up 11%, with NEV production at 10.96 million units, rising by 30% and a penetration rate of 46%, while fuel vehicle production decreased by 1% to 13.09 million units.

As the external environment becomes more complex and severe, with rising unilateralism and trade protectionism impacting supply chain stability, uncertainties remain regarding the foundation of domestic economic recovery, highlighting challenges such as insufficient effective demand and disordered competition in the market. The automotive industry's goal to maintain growth continues to be formidable.

The vehicle replacement subsidy policy has significantly impacted retail performance from January to September 2025, resulting in higher annual growth expectations for domestic passenger car sales. However, 2026 is anticipated to be challenging, prompting calls for long-term effective policies to enhance the automotive purchase experience, such as reducing individual income tax for car buyers, promoting NEVs in rural areas, optimizing the driver's license application process for budget-friendly electric vehicles with less than 200 km range, tax exemptions for compliant pure electric vehicles, and further incentives for marriage and childbirth related to vehicle purchases.

In September 2025, the NEV lithium battery market showed strength, with substantial gains in power battery production and domestic sales. Currently, the mainstream battery energy density for pure electric vehicles ranges from 125 to 160 Wh/kg, with some improvements in the latest high-energy-density batteries. In total, power and other batteries produced in September reached 151 GWh, a 50% increase year-on-year. From January to September, cumulative production of power and other batteries reached 1,122 GWh, up 44% year-on-year.

In 2025, the installation ratio of power batteries remains at 44%, with ternary batteries accounting for 39% and lithium iron phosphate batteries accounting for 46%. The installation ratio of power batteries rose to 50% in September, with ternary battery installation at 44% and lithium iron phosphate at 52%, reaching a peak in battery installation activity for the year.

In September 2025, the qualified production of NEV products was 1.43 million units, up 22% year-on-year. From January to September, 9.59 million NEVs received domestic certifications, a year-on-year increase of 29%, including 5.8 million pure electric passenger vehicles, a 44% increase; 3.28 million plug-in hybrid passenger vehicles, a 10% increase; and 460,000 pure electric commercial vehicles and trucks, indicating a strong production performance.

In the third quarter of 2025, vehicles with battery energy densities above 160 Wh/kg accounted for 7%, showing a significant decrease compared to 11% in 2024, mainly due to the energy density reduction of ternary batteries as they are substituted by lithium iron phosphate batteries. Products with energy densities below 125 Wh/kg saw a drop to 1%.

The competitive landscape among battery companies highlights a clear dominance of CATL and BYD, with CATL's share outpacing BYD's for lithium iron phosphate batteries. Changes in industry competition are rapid, with strong performances from Eve Energy and Zhongchuang Innovation, and visible improvements from Sinowatt, Ruipu Lanjun, Hive Energy, and Jiedian New Energy.

In September 2025, the pickup market analysis showed that sales of pickups totaled 46,000 units, a 1.9% year-on-year decrease, but a 14.6% month-on-month increase, still maintaining a high level compared to the past five years. From January to September, pickup sales reached 432,000 units, an 11.2% increase year-on-year. Great Wall Motors continues to lead the pickup sector both domestically and internationally. With steady exports, companies such as Great Wall Motors, SAIC Maxus, Zhengzhou Nissan, Changan Automobile, and JAC Motors have demonstrated strong performances.

In the domestic pickup retail market, Great Wall Motors, Jiangling Motors, Zhengzhou Nissan, and JMC stand out, reinforcing the “one dominant, three strong” market structure. The core demand for pickups is primarily found in the southwest and northwest regions, where pickup demand is particularly high, representing 44.4% of overall demand.

As the growth rate of NEV pickups slows down, the market for NEV pickups is lagging behind that of electric commercial vehicles intended for logistics. For pickup exports, the overall industry has excelled, with cumulative exports reaching 244,000 units in 2024, a remarkable 85% growth. In September 2025, pickup exports totaled 26,000 units, marking a 3% year-on-year increase and a 22% month-on-month increase. Cumulatively, from January to September, exports reached 228,000 units, up 28% year-on-year.

In terms of NEV pickups, September 2025 saw sales of 4,000 units, reflecting a 104% increase year-on-year and a 31% month-on-month growth. Cumulatively, sales from January to September reached 54,000 units, highlighting a remarkable 440% growth compared to traditional fuel pickups. The surge in demand for electric light trucks in logistics indicates that electrification is becoming the best approach to enhance rights for commercial vehicles.

With the ongoing electrification and the diversification of vehicle types, the pickup market's prospects are gradually improving. In September, sales figures for NEV pickups include 1,593 units for Geely Radar, 1,593 for BYD pickups, 793 for Changan range-extended pickups, and 404 for Zhengzhou Nissan., with other pickup manufacturers showing significant growth in their NEV offerings. As domestic NEV projects crystalize, an expanding market is anticipated for Chinese pickup trucks to cater to both domestic and international demand.