China's Auto Market Shrinks as EVs Gain Ground, Exports Surge
By Jiahui Huang
China's auto market remained under pressure in August, as the industry shifts its focus to electric vehicles and exports because of high oil prices and subdued domestic demand.
Retail sales of passenger cars fell 23.6% from a year earlier to 1.54 million units in August, data from the China Passenger Car Association showed Tuesday. Sales rose 5.5% from July, showing signs of stabilization after a downturn that started late last year.
That said, the recovery was uneven, with gasoline-powered vehicles hit by weak demand and high oil prices.
Retail sales of new-energy vehicles, a term used to describe both EVs and hybrid cars, fell 10.1% from a year earlier to 1.005 million units in August. That accounted for a record 65.2% of total passenger car sales. Meanwhile, sales of fuel-powered vehicles fell about 40% last month, CPCA data showed.
The data points to a broader reshaping of China's auto market, as EVs take an increasing share of a shrinking pool of domestic buyers. Fuel prices are rising quickly, while Chinese automakers are offering increasingly affordable EVs with more advanced driver-assistance features.
Weak domestic demand continues to push Chinese automakers to seek growth overseas.
Exports of passenger cars jumped 77.8% to 888,000 units in August from a year earlier, the CPCA said. Exports of new-energy vehicles more than doubled for the seventh straightmonth, hitting 518,000 units in August.
BYD, Geely and Chery were among the largest EV exporters in August, while newer players such as Leapmotor continued to expand overseas. Tesla exported 36,119 units made at its Shanghai plant.
The next test will come in September, traditionally the beginning of China's peak season for auto sales. However, the market faces a high base of comparison this year, as Chinese consumers rushed to buy vehicles last year ahead of changes to government subsidies.
Write to Jiahui Huang at jiahui.huang@wsj.com
(END) Dow Jones Newswires
September 08, 2026 03:29 ET (07:29 GMT)
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