China’s passenger vehicle wholesale market experienced a downturn in January 2026, with total sales reaching 1.973 million units – a 6.2% decline year-over-year. Despite the overall contraction, new energy vehicles (NEVs) continue to gain ground, with domestic brands dominating the sales charts.
BYD Dominates Wholesale Rankings
The BYD Song series topped the wholesale rankings with 42,227 units sold, solidifying BYD’s position as a leading force in the Chinese auto market. The Geely Galaxy EX2 (Xingyuan) and Geely Boyue followed closely behind, indicating the strength of domestic brands in securing market share.
The BYD Song family now includes multiple variants: the 2026 Song Pro DM-i, Song L DM-i, and dedicated ADAS editions, along with fully electric (EV) options. The upcoming Song Ultra EV, scheduled for release later in 2026, signals BYD’s commitment to expanding its product line further.
NEVs Gain Ground Despite Market Slowdown
Among the top 17 best-selling models (exceeding 20,000 units in wholesale), 13 were NEVs, confirming the rapid shift towards electric and hybrid vehicles. Tesla’s Model Y ranked fourth with 38,916 units, while Xiaomi’s YU7 secured fifth place with 37,869 units sold. This shows that global players like Tesla are still relevant, but domestic competition is rising fast.
The wholesale penetration rate of NEVs reached 43.8% in January, an increase of 1.3% year-over-year. Notably, domestic brand NEVs accounted for a substantial 57.9% of this penetration rate, showcasing the strong preference for locally produced electric vehicles.
Retail Sales Lag Behind Wholesale Figures
While wholesale numbers suggest a resilient NEV sector, retail sales tell a different story. China sold 1.544 million passenger vehicles at retail – a steeper 13.9% year-over-year drop. NEV retail sales fell by 20.0% to 596,000 units, with the penetration rate declining to 38%.
This difference between wholesale and retail figures indicates potential inventory buildup or challenges in converting orders into actual sales, which could be due to economic factors or changing consumer behavior.
The continued dominance of domestic NEV brands in wholesale while retail struggles suggests a growing price war, increasing competition, or a shift in consumer demand. The Chinese auto market remains dynamic, with BYD leading the way while Tesla and Xiaomi vie for position in a rapidly evolving landscape.
