Chinese Automakers' Sales Largely Fail to Gallop Into New Year — Update

2026-03-02 07:00:59

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 long Spring Festival holiday, which lasted nine days in 2026, but the latest figures also underscore the tough road ahead for Chinese carmakers 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, while Great Wall Motor reported a 6.8% decline in sales to 72,594 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 among the month’s standout performers, posting a 58% jump in sales to 20,797 units. Hangzhou-based Leapmotor continued to gain market share, selling 28,067 units last month, up 11% from a year ago.

February sales were affected by the timing of the Lunar New Year, according to Vincent Sun, senior equity analyst at Morningstar. The holiday fell in mid-February this year, but in late-January last year.

Despite the holiday-induced distortion, first-quarter sales will likely be soft, given the rush-buying last year amid concerns that subsidies for EV purchases wouldn’t be extended, Sun said.

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, data from the China Passenger Car Association showed.

But in an encouraging sign, the CPCA said last month that February could mark the trough for auto sales this year, given that the Lunar New Year falls during the month.

Morningstar remains positive about the sector’s growth, pegging 2026 sales growth at 10% to 15%.

“As the renewed trade-in scheme ties subsidies to car prices, we think the higher-priced segment would benefit more from the policy than the mass segment this year,” Sun said.

Chinese automakers are also starting to release their key products for the year and tech upgrades following the Lunar New Year holiday, Nomura analysts wrote in a note. The rollout of new technology and products, as well as some promotions and subsidies from local governments, may lift sentiment slightly, they said.

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

Xiaomi led declines, falling 3.8% in afternoon trading, while XPeng was down 0.5% and Geely shed 1.8%. NIO’s shares were 2.7% lower and Li Auto lost 0.5%.

BYD bucked the declines, rising 4.4%. Its Shenzhen-listed stock rose 7.6%.

Write to Jiahui Huang at [email protected]

(END) Dow Jones Newswires

March 02, 2026 01:04 ET (06:04 GMT)

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