The real test of Chinese cars has just begun

The real test of Chinese cars has just begun

Multiple market data and performance indicate that 2026 may become the most tragic year in the history of China's automotive industry.

The growth rate of new energy exports is not slow, but the current base is still relatively small

According to industry data compiled by the China Association of Automobile Manufacturers, the monthly retail sales of passenger cars (corresponding to domestic sales) achieved a year-on-year growth of about 15% at the beginning of this year due to factors such as the "price war". However, the year-on-year growth rate has rapidly declined since July, and even experienced an overall negative growth in October. Based on the sales statistics of the China Association of Automobile Manufacturers in the first three weeks of November, the rapid decline in industry sales is quite intense

In the first week of November, the average daily retail sales of passenger cars nationwide were 46000, a year-on-year decrease of 19% and a month on month decrease of 4%;

In the second week of November, the average daily retail sales of passenger cars nationwide were 67000, a year-on-year decrease of 9% and a month on month decrease of 7%;

In the third week of November, the average daily retail sales of passenger cars nationwide were 71000, a year-on-year decrease of 7% and a month on month increase of 7%.

The overall figures are like this, so the performance of car companies is naturally not much better. Taking the achievement of this year's goals by car companies as an example, as of November, only a few relatively small new forces have met the standards ahead of schedule (although car companies like to set higher goals, the situation of not meeting the standards this year is indeed the most prominent in recent years):

BYD: Target 4.6 million vehicles, cumulative sales from January to November of 4.18 million vehicles, there are still challenges to achieving the target;

SAIC Group: Target 4.5 million vehicles, with a cumulative sales volume of 4.11 million vehicles from January to November, expected to meet the target;

FAW Group: Target 3.45 million vehicles, with a cumulative sales volume of 3 million vehicles from January to November. There are still challenges to achieving the target (including some commercial vehicles);

Chery: Target 3.26 million vehicles, cumulative sales from January to November are 2.56 million vehicles, with no hope of meeting the standard;

Geely Automobile: The original target was 2.71 million vehicles, but it was later raised to 3 million vehicles. The cumulative sales from January to November are 2.79 million vehicles, which is expected to meet the target;

Hongmeng Zhixing: Target 1 million vehicles, cumulative sales from January to November 494000 vehicles, with no hope of meeting the standard;

Xiaomi Auto: Target 300000 units, with cumulative sales exceeding 320000 units from January to November, meeting the standard;

Ideal car: target 700000 units, cumulative sales of 360000 units from January to November, with no hope of meeting the standard;

Zero Run Cars: Target 500000 units, cumulative sales from January to November 536000 units, already met the standard;

NIO: Target 460000 vehicles, cumulative sales of 278000 vehicles from January to November, with no hope of meeting the standard;

Xiaopeng Motors: The target is 350000 vehicles, with a cumulative sales volume of 392000 vehicles from January to November, which has already been met;

The above sales figures were achieved against the backdrop of over 70 new car models being launched intensively in the industry from September to October (with sufficient supply), and the automotive industry's profits dropping to the lowest level in nearly five years (with a monthly average profit margin of only 3.8%, and companies fully offering discounts).

These real data not only indicate that the Chinese automotive industry will usher in a "big cold wave" in 2026, but the industry will shift from subsidy driven and scale competition to real demand and efficiency competition. More importantly, the key "differentiation" that has yet to be carried out in the Chinese automotive industry has finally shown a trend of being staged.

Why is 2026 destined to be 'bitterly cold'?

From 2015 to 2025, the new energy transformation of Chinese automobiles has gone through ten years. In the past decade, almost every sales jump has been accompanied by subsidies and a "price war".

But as 2026 approaches, the improvement effect of both is rapidly declining, coupled with the previous "overdraft" of future demand, creating a "big environment" where all car companies find it difficult to achieve results today.

First, let's talk about the subsidy situation. According to the data released by the Ministry of Commerce, the car sales brought by the trade in of old vehicles will exceed 11.2 million units in 2025, with a ratio of approximately 1:2 between "scrapping applications" and "replacement applications". According to the corresponding statistics of the China Association of Automobile Manufacturers, the actual retail sales from January to November this year exceeded 21 million vehicles. In other words, the proportion of sales participating in trade in has exceeded 50%.

The reason why the numbers are so exaggerated is twofold, which is that the discounts are too tempting: when combined with "provincial subsidies+national subsidies+purchase tax incentives", consumers can usually save 20000 to 30000 yuan. Combined with the already outstanding comprehensive cost-effectiveness in the Chinese market (with obvious price advantages for products of the same level globally), mainstream consumers (mainly models priced between 150000 to 200000 yuan) can easily enjoy an additional 15-20% discount.

However, policy implementation is easy, but adjustment or withdrawal is very difficult.

With the early consumption of national subsidy funds in the second half of this year and changes in the demand for subsidy implementation in some regions, more than 20 cities across the country have suspended or adjusted their applications for car trade in subsidies for various reasons. Currently, most regions that are still maintaining subsidies implement quota controls, such as limiting the daily subsidy amount or quota for each province.

These adjustments have directly affected the sales of automobiles in multiple regions. Through communication with sales personnel from multiple brands, HuXiang Automobile learned that in the last few days when subsidies are about to be withdrawn, most consumers will place orders in a concentrated manner, and then the market will quickly cool down, with very limited overall sales promotion effect.