In May 2026, all of the top ten bestselling cars in China were new energy passenger vehicles, notes a report from the China Automobile Dealers Association (CADA) published on 9 June. This marks the first time that no combustion vehicles appear on the list, reports New Hunan.
The CADA report defines “new energy passenger vehicles” as battery electric vehicles, plug-in hybrid electric vehicles, and extended-range electric vehicles.
In May, around six out of every 10 cars sold were new energy vehicles (NEVs) – a record high, the report notes. However, overall domestic retail auto sales that month saw a year-on-year decrease of 22.1%.
In 2025, the retail market penetration rate of new energy passenger vehicles in China – meaning the NEV share of consumer auto sales – reached nearly 54%. This marked the turning point of new energy vehicles becoming the automotive market’s mainstream product. In April 2026, the 60% mark was surpassed for the first time, reports China Business Network.
The emission reduction from the increased NEV sales remains to be seen. Amid intensified competition, many carmakers are launching larger high-end vehicles. These vehicles are heavier mainly due to their bigger batteries, and generally consume more energy, reducing the efficiency gains associated with electrification.
The emission reduction benefits of electric vehicles also depend on the degree of decarbonisation of the power grid. A recent paper published in Sustainable Energy Research notes that vehicle electrification “must align with clean energy transition to achieve carbon neutrality”.
Read Dialogue Earth’s previous analysis on China’s electric-vehicle-to-grid charging.