Autos Sector China auto sales (May): Moment of truth for ICE autos this summer; NEV shift continues, despite reversal of price gap with ICE

Research evidence excerpt

Autos Sector China auto sales (May): Moment of truth for ICE autos this summer; NEV shift continues, despite reversal of price gap with ICE

J P M O R G A N Asia Pacific Equity Research

11 June 2026

Autos Sector

China auto sales (May): Moment of truth for ICE autos

this summer; NEV shift continues, despite reversal of

price gap with ICE

China’s passenger vehicle retail sales continued to fall in May, but exports hit Japan Equity Research

a new record high for the third straight month, breaking above 800k units for

Autos & Auto Parts

the month. The shift to new energy vehicles (NEV) was evident in domestic

demand, with the NEV penetration rate rising 160bp MoM to 63%. In Akira Kishimoto AC

response to soaring export demand, major Chinese manufacturers are (81-3) 6736-8646

akira.x.kishimoto@jpmorgan.com

extending delivery dates and raising prices on some NEV models. On the other

Wencong Zhang

hand, popular internal combustion engine (ICE) models dropped out of the (81-3) 6736-8627

top sales rankings, despite deeper discounts. We assume that ICE auto sales wencong.zhang@jpmorgan.com

will fall this summer because of seasonal factors, but with the number of used JPMorgan Securities Japan Co., Ltd.

cars (mainly ICE autos) with zero recorded mileage rising again, declines in

new vehicle prices and sales volumes could become more of a concern.

• Domestic NEV penetration accelerates, price gap with ICE autos reverses:

China’s May retail sales of passenger vehicles amounted to 1,528k units (–22%

YoY), down YoY for the eighth consecutive month. Whereas retail sales were

579k units (–38% YoY) for ICE autos, demand for NEVs was solid at 849k

units (–7% YoY), and the penetration rate rose from 61% in April to 63% in

May. Major Chinese OEMs have hiked NEV prices, mainly reflecting