February New Energy Vehicle Market Penetration Rate: 42%

February New Energy Vehicle Market Penetration Rate: 42%

[Introduction] In February, the number of effective workdays decreased month-on-month, vehicle production and sales declined, and the market penetration rate of new energy vehicles was around 42%, with over 23% of gasoline consumption being replaced. Rising domestic refined oil prices may boost consumer enthusiasm for purchasing new energy vehicles, and it is expected that the substitution rate will continue to increase in March.

By 2026, policies such as vehicle purchase subsidies will be adjusted, prompting consumers to release their demand for buying and replacing cars earlier. Additionally, February coincided with the Spring Festival holiday, resulting in fewer effective workdays, which led to a decline in vehicle production and sales. However, the development momentum of new energy vehicles remains strong, with the gasoline consumption substitution rate reaching 23.61%.

February New Energy Vehicle Market Penetration Rate: 42.38%

According to data from the China Association of Automobile Manufacturers, in February, total domestic vehicle production was 1.672 million units, down 20% year-on-year. Among these, new energy vehicle production was 694,000 units, a 22% decrease year-on-year. In terms of sales, total vehicle sales in February were 1.805 million units, down 15.22% year-on-year, with new energy vehicle sales at 765,000 units, a 14.2% decrease. Looking at domestic market sales, February’s total new energy vehicle sales were 483,000 units, including 310,000 pure electric vehicles and 173,000 plug-in hybrid vehicles.

New Energy Vehicles’ Gasoline Consumption Substitution Rate Near 23%

In February, supported by the Spring Festival holiday, consumers’ driving range expanded, and the period before and after the holiday saw increased trips home and back to work, supporting the terminal demand for gasoline. Despite three fewer natural days compared to January, gasoline consumption saw limited month-on-month fluctuations. According to data from Zhuochuang Information, domestic gasoline consumption in February was approximately 12.1457 million tons, a 0.76% decrease month-on-month. Excluding scrappage rates and considering the substitution effects of pure electric and plug-in hybrid vehicles on gasoline, Zhuochuang’s model estimates that by February 2026, China’s new energy vehicles will have replaced about 3.73 million tons of gasoline, accounting for 23.61% of gasoline consumption, an increase of about 5 percentage points year-on-year, impacting terminal gasoline consumption. However, given the current market application of new energy vehicles in ride-hailing and taxis, the actual substitution rate for gasoline may be somewhat higher.

New Energy Vehicles’ Gasoline Substitution Rate Expected to Rise Further in March

From the perspective of domestic consumption, March will see gradually rising temperatures, with increased demand for commuting and self-driving trips. Coupled with three additional natural days compared to February, gasoline consumption is expected to benefit from the spring seasonal peak and rebound month-on-month. International crude oil prices remain high, supporting elevated domestic refined oil prices, which increases the operating costs of fuel-powered vehicles and further stimulates consumer interest in purchasing new energy vehicles. Meanwhile, effective workdays in March will increase month-on-month, likely leading to higher sales of new energy vehicles and a substitution rate for gasoline reaching around 25%.