China EV sales create record-high penetrate rate in Jul

China's automotive industry remained broadly stable in July 2026, though the market entered its traditional off-season, with both month-on-month and year-on-year sales declining. However, the penetration rate of electric vehicles (EVs) hit a record high, with the decline largely driven by conventional fuel vehicles.

In July, the auto market entered its traditional off-season, with foot traffic and orders naturally declining. This was compounded by the pull-forward of some demand from mid-year sales campaigns, persistent high temperatures across the country, and typhoon and flood disruptions in some regions, all of which contributed to a seasonal month-on-month decline and a modest year-on-year dip. Exports continued to grow rapidly, exceeding 1 million units for the second consecutive month, with EVs accounting for more than 50% of total exports for the second straight month.

According to data from the China Association of Automobile Manufacturers (CAAM), China's vehicle sales reached 2.584 million units in July 2026, down 8.04% month-on-month and 0.35% year-on-year. Conventional fuel vehicle sales stood at 1.023 million units, marking a decline of 12.34% MoM and 23.14% YoY, while EV sales reached 1.561 million units, falling 4.99% MoM but rising 23.69% YoY. Together, the July EV penetration rate reached 60.41%, with domestic market penetration at 65.41%, EV passenger vehicle penetration at 68.1%, and EV commercial vehicle penetration at 46.94%, all record highs.

By end-June, China's total vehicle fleet stood at 371 million units, of which EVs accounted for 48.97 million units, or 13.19% of the total, up 2.92 percentage points from a year earlier. In the first half of the year, 5.195 million new EVs were registered, representing 49.42% of all newly registered vehicles, up 4.45 percentage points year-on-year.

Steady EV penetration and high oil prices in the first half, which curbed long-distance travel and boosted short-distance EV and public transport use, are set to displace 24% of full-year gasoline consumption, or 46.6 million tonnes.

More recently, from May to July, gasoline consumption increased month-on-month as rising temperatures lifted vehicle air conditioning demand and summer holidays spurred long distance travel. According to OilChem's data, July gasoline consumption stood at 12.51 million tonnes, with average daily consumption up 4.55% month-on-month but down 6.38% year-on-year.

Source: Mysteel OilChem

In August, with summer travel peak continuing, gasoline consumption is expected to rise to 12.95 million tonnes, up 3.51% month-on-month and down 6.02% year-on-year, with month-on-month growth continuing and the year-on-year decline narrowing further.

Written by Aggie Hu, huchenying@mysteel.com

Edited by Navy Liu, liuchuanjun@mysteel.com