China NEV retail sales fall 16.7% in September as penetration hits record 67%

China's retail sales of new energy vehicles fell 16.7% year-on-year to 1.084 million in September, the ninth consecutive month of annual decline, according to China Passenger Car Association data released Monday. Sales were up 7.8% from August, and NEVs captured a record 67.0% of passenger vehicle retail sales, 9.1 percentage points above a year earlier. Penetration reached 84.5% at domestic Chinese brands, 44.9% at luxury brands and only 15.9% at mainstream joint-venture brands. Domestic-brand NEV retail sales dropped 19% year-on-year, joint ventures rose 36% and luxury brands slipped 8%, with the CPCA citing unfavorable subsidy policies for steep declines in domestic A00-segment EVs.

Wholesale figures were stronger. NEV wholesale sales rose 11.3% year-on-year and 10.0% month-on-month to 1.666 million, lifting wholesale penetration to a record 65.4%, up 12 percentage points. Battery electric vehicles were the only powertrain category to grow, climbing 18.3% to 1.126 million, while plug-in hybrids dipped 0.1% to 423,000 and extended-range EVs fell 4.0% to 117,000.

Exports continued to carry the industry. Total passenger vehicle exports rose 73.7% year-on-year to 917,000 in September, accounting for 36% of automakers' passenger vehicle sales, while NEV exports jumped 163.5% to 558,000 — 60.8% of all passenger vehicle exports. First-nine-month NEV exports climbed 138.8% to 3.887 million. Total passenger vehicle retail sales, meanwhile, fell 28.0% year-on-year to 1.618 million and were down 21.7% over nine months at 13.33 million, with gasoline vehicle retail sales dropping 43%.

The CPCA attributed the retail decline to several factors, including a Mid-Autumn Festival holiday that fell earlier, in late September, weakening sales that week. A rush to buy before subsidies expired in some provinces last September created a high comparison base. High oil prices continued to dampen gasoline demand, while AI-driven surges in memory and chip prices along with supply shortages slowed the sales contribution of new NEV models, the association said.

BYD led domestic NEV retail with 246,816 vehicles in September, followed by Geely Auto at 119,682 and Leapmotor at 78,202. Tesla came next with 64,837, ahead of Changan Automobile at 61,732 and SAIC-GM-Wuling at 54,810. Emerging EV makers held a 23.6% share of the retail market, up 3.4 percentage points, driven mainly by Leapmotor and Nio, with BEVs accounting for 75% of their sales.

Looking to October, the CPCA said the month has 18 working days, unchanged from a year earlier, and with the Mid-Autumn holiday already over more selling time may help showroom traffic recover. Trade-in subsidies are expected to increase later this year after a slow start, in contrast to last October's gradual withdrawal, which should help stabilize the market. The association expects NEV penetration to remain above 65% as high oil prices accelerate the shift away from gasoline vehicles. Leapmotor and Zeekr set fresh records, while Xiaomi topped 40,000 deliveries for its highest monthly total this year.