China's new energy vehicle (NEV) sales increased by 14% compared to the same period last year, reaching 1.003 million units, according to preliminary data from the China Passenger Car Association (CPCA).

In July 2025, China's total wholesale sales of passenger vehicles reached 2.192 million units, marking a 12% year-on-year increase but a 12% decrease compared to the same period last month. The average daily retail sales during the first week of July stood at 39,660 units, showing a 1% year-on-year growth but a 6% decrease compared to the same period last month.

Despite a high penetration rate of 54.7% for new-energy vehicles (NEVs) in July, the growth of China's NEV retail sales might be slowing. This is due to several factors, including market saturation and competition, a cooling price war, changing consumer preferences, global market influences, and economic factors and policies.

Market saturation and competition can lead to a slower growth rate as more potential buyers already own NEVs, increasing competition among manufacturers. The price war among automakers in China has been cooling down, leading to a decrease in incentives that once aggressively drove sales. As prices stabilize, the rapid growth seen in previous periods may slow.

While technological advancements drive sales to some extent, consumer preferences might become more varied as the market matures. This could lead to a shift towards more niche or hybrid options, potentially slowing growth in certain segments. Despite China's dominance in the NEV market, global trends and economic conditions can influence consumer behavior. For instance, the decline in plug-in hybrid sales globally might indicate a shift towards full electric vehicles, affecting overall growth dynamics.

Economic conditions, government policies, and incentives can significantly impact NEV sales. Any changes in these factors could influence growth rates as well. So far this year, China's cumulative passenger NEV retail sales were 6.47 million units, up 30% year-on-year.

In the latter half of July, wholesale and retail sales showed a mixed picture. From July 14 to 20, the average daily wholesale sales of passenger vehicles in China were 57,826, up 8% year-on-year but down 17% from the same period last month. China's daily wholesale sales of passenger cars from July 21 to 27 were 77,867, up 10% year-on-year but down 41% from the same period last month.

From July 28 to 31, China's daily wholesale sales of passenger cars increased to 171,756, up 1% year-on-year and up 11% from the same period last month. However, the daily retail sales during the same period averaged 66,611, up 5% year-on-year but down 30% from the same period last month.

In the fourth week of July, China's daily retail sales of passenger cars averaged 97,491, down 1% year-on-year and down 4% from the same period last month. China's total retail sales of passenger vehicles in July reached 1.834 million units, up 7% year-on-year but down 12% from June.

For the month of July, China's cumulative retail sales of passenger vehicles reached 12.74 million units, up 10% year-on-year. China's cumulative wholesale sales of passenger vehicles this year reached 15.47 million units, up 12% year-on-year.

In terms of NEV sales, China's passenger NEV retail sales penetration rate this year is 50.81%. China's passenger NEV wholesale sales in July were 1.179 million units, up 25% year-on-year but down 4% from June. China's passenger NEV retail sales in July were 1.003 million units, up 14% year-on-year but down 10% from June.

In the fifth week of July, China's daily retail sales of passenger cars averaged 97,491, down 1% year-on-year and down 4% from the same period last month. China's passenger NEV wholesale sales in July were 1.179 million units, up 25% year-on-year but down 4% from June.

As of the week ending August 3, China EV insurance registrations were as follows: Nio - 3,450, Tesla - 11,020, and Xiaomi - 7,580. China's passenger NEV retail sales penetration rate in July was 54.7%.

In conclusion, while China's passenger vehicle sales showed a positive year-on-year growth in July, the growth rate for new-energy vehicles appears to be slowing due to various factors. Monitoring these trends and factors will be crucial for understanding the future direction of the Chinese automotive market.

China's new energy vehicle (NEV) sales increased by 14% compared to the same period last year, reaching 1.003 million units, according to preliminary data from the China Passenger Car Association (CPCA).