China Auto/EV/Batteries - Lowering industry estimates post weak Apr trend

Research evidence excerpt

China Auto/EV/Batteries - Lowering industry estimates post weak Apr trend

Global Markets Research

17 May 2026China Auto/EV/Batteries

EQUITY: AUTOS & AUTO PARTS

Lowering industry estimates post weak Apr trend Research Analysts

China Autos & Auto Parts

2026 a transformation period for the China auto industry Joeljoel.ying@nomura.comYing, CFA - NIHK

+852 2252 2153

Weak opening for the China auto market in 2026 indicates a transition period for the Global EV Batteries & Materials

entire industry; we lower our estimates for the market while wait for a potential

recovery Ethan Zhang - NIHK

ethan.zhang@nomura.comThe China auto industry delivered 2.1mn wholesale shipments (-4.2% y-y, -11.7% m-m) in

+852 2252 2157

Apr-26; PV retail sales, excluding minivans, were at 1.4mn units (-21.4% y-y, -16.0% m-

m), according to CAAM and CPCA, both showing sequential decline while the domestic

market maintained the double-digit y-y decline, with the concerning situation within the

China auto market continuing. China PV EV monthly retail sales were at 850k units in the

month (-6.0% y-y, +0.2% m-m) while EV penetration increased to 60.6% in Apr-26, as ICE

car sales suffered a 37.7% y-y decline in the domestic market, partially due to rising oil

prices, in our view.

With the anti-involution trend from mid-2025, the revoking of the 50% EV purchase tax

exemption from 2026 and also the tightening subsidy policies, the entire market demand

evidently cooled down in the first four months of 2026. Considering the current market

situation, we cut our FY26-27F China auto sector PV wholesales forecasts by 8% each.

We now estimate a 4.2% y-y decline in PV wholesales to 28.8mn units in FY26F.

Meanwhile, we raise our China auto export sales forecasts by 19-24% to 7.4mn/8.1mn for