The world’s largest car market hits 60% NEV market share — and is now exporting more electric vehicles than combustion ones

#Summary: **The world’s largest car market hits 60% NEV market share — and is now exporting more electric vehicles than combustion ones**

China’s auto market just crossed a milestone that would have seemed implausible even three years ago. According to preliminary data released Friday by the China Passenger Car Association (CPCA), new energy vehicles (NEVs — battery electric, plug-in hybrid, and fuel cell vehicles) are expected to account for approximately 60.6% of all passenger car retail sales in April 2026, the first time the monthly figure has exceeded 60%.

To put that in context: China sells roughly 25 million passenger cars a year — more than any other country on earth. A 60% NEV share in that market dwarfs the entire EV fleet of most other nations combined.

**The numbers**

April NEV retail sales are estimated at around 860,000 units. That’s actually slightly below the same month last year (905,000), because China’s market is currently in a subsidy hangover — a purchase tax rebate that had covered up to a third of entry-level EV prices expired at the end of 2025, triggering a demand correction across Q1 2026. Year-on-year volumes are down roughly 20% cumulatively. Yet NEV *penetration* keeps hitting records, because ICE vehicle sales are falling even faster.

The structural shift is now clear: internal combustion is the residual category. Joint venture and foreign brands are in freefall. Germany’s five largest automakers — Volkswagen, Audi, BMW, Mercedes-Benz, and Porsche — combined held just 1.6% of China’s EV market in Q1, a record low, with VW’s EV sales down over 72% year-on-year.

**The export story**

With domestic penetration saturating and production capacity built for continued growth, Chinese manufacturers are redirecting output overseas. In March 2026, passenger vehicle exports hit 695,000 units — up 74% year-on-year. NEVs now represent over 50% of all Chinese passenger vehicle exports, the first time electrified vehicles have outnumbered combustion ones in outbound shipments. NEV exports alone surged 140% year-on-year in March, with Q1 total NEV exports up 124%.

BYD, which captured 22.8% of China’s domestic NEV retail market in March, has raised its 2026 export target to 1.5 million vehicles as it offsets domestic softness with international expansion.

The 60% figure is arriving during a period of weak consumer sentiment, expiring subsidies, and macroeconomic caution, which makes it structurally significant. The preference has shifted independently of policy incentives.

As Chinese manufacturers redirect excess capacity to export markets, the same transformation that reshaped China’s domestic fleet is increasingly being exported alongside the vehicles themselves.