Two-thirds of car sales in China are now electric vehicles

New-energy vehicles (NEVs), mainly battery-electric cars and plug-in hybrids, accounted for a record 67% of China’s new car sales in September 2026, up from 6% in 2020 and 58% for the year to date. Their growing share reflects both the long-term shift toward electric transport and a sharp contraction in the overall car market: September passenger-car sales fell 28% year on year. Fuel-only car sales dropped especially steeply, down 43% in September and 31% for the first nine months. NEV sales also declined, but less sharply overall; battery-electric sales were more resilient than plug-in hybrid sales. The end of a long-running purchase-tax exemption contributed to a January dip in NEV share, while trade-in incentives and new models have supported its recovery.

Higher petrol prices amid the Strait of Hormuz crisis have made combustion-engine cars less attractive and strengthened the case for electrification. Analysts estimate that China’s expanding passenger-car EV fleet has displaced 143 million barrels of oil since the crisis began, though weaker demand, policy changes and tighter financing have also restrained vehicle purchases. Further gains in NEV market share may be limited, with one analyst expecting it to remain below 80%. As domestic demand weakens, exports have become increasingly important: Chinese NEV exports more than doubled year on year in September, reaching 558,000 vehicles, compared with 1.084 million sold domestically. The export surge is prompting trade barriers in Europe and elsewhere, while China is also reducing export incentives.