Global NEV sales up 14% in H1 2026, China penetration nears 50%

The global new energy vehicle (NEV) industry is transitioning from the "first half" — driven by scale and speed — to the "second half," which emphasizes quality and efficiency. This was a key signal conveyed by participants at the 2026 World New Energy Vehicle Congress.

Market Data Highlights

According to the data:

• Global NEV sales in the first half of 2026 reached 11.234 million units, up 14% year-on-year, with a market penetration rate of approximately 24%.
• In China, NEV sales totaled 7.446 million units in the same period, a 7.3% increase year-on-year, with a penetration rate of 49.6% and exports reaching 2.355 million units.

Industry Outlook and Strategic Direction

In his keynote report, Wan Gang, Honorary Chairman of the China Association for Science and Technology and President of the World New Energy Vehicle Congress, stated that the global NEV market is now developing steadily and has entered a phase of widespread adoption.

"China's NEV industry has forged a path of deep integration between technological innovation and industrial innovation," Wan said. He emphasized the need for sustained efforts to improve quality and efficiency, ensuring that by 2035, NEVs become the mainstream of new vehicle sales and contribute more to the comprehensive green transformation of economic and social development.

Profitability Pressures Amid Growth

Despite scale expansion, profitability pressures have become a central concern.

Data from the China Association of Automobile Manufacturers shows that the average profit margin in the domestic vehicle manufacturing sector fell to 1.5% in the first half of this year — the lowest level in nearly a decade.

Ralf Brandstätter, member of the Board of Management of the Volkswagen Group, noted that as technologies such as NEVs, intelligent driving, and artificial intelligence accelerate, the pace of industry innovation continues to rise. However, companies face challenges including shorter R&D investment recovery cycles and mounting profitability pressures.

Accelerated Product Cycles

The acceleration of product iteration is a major factor behind profitability pressures. Previously, a vehicle model could maintain a lifecycle of about 7 years; today, that has been compressed to roughly 3 years.

"New models often reach peak sales within three months of launch, and consumer attention quickly shifts to the next generation," Brandstätter said.

Call for a New Transformation

Hubertus Troska, Senior Executive Vice President of Mercedes-Benz (China) Investment Co., Ltd., stated that following the waves of electrification and intelligence, the automotive industry urgently needs another transformation — from high-speed growth to high-quality development, from scale expansion to value creation, and from competing on speed to competing on quality.

Gao Le, a member of the Board of Management of BMW Group, believes that future competitiveness in the automotive industry will depend not only on the speed of technological innovation but also on balancing quality, safety, efficiency, and long-term value. He stressed the importance of building a more resilient industrial and supply chain through open cooperation.

Diverse Technology Pathways

On the technology front, "diverse and parallel" has become a frequently mentioned term.

Hildegard Müller, President of the German Association of the Automotive Industry, told Science and Technology Daily that the electric transition requires multi-path coordination, promoting the application of battery electric vehicles, plug-in hybrids, range-extended electric vehicles, and hydrogen fuel cell vehicles according to local conditions.

Matsuaki Yasuaki, Vice Chairman and Executive Managing Director of the Japan Automobile Manufacturers Association, also advocated for diversified development pathways.

Zhu Huarong, Chairman of Changan Automobile and Chairman of the World New Energy Vehicle Development Organization, predicted that over the next 10 to 15 years, no single technology route will dominate globally, making diverse and parallel approaches the rational choice.

Open Cooperation Amid Trade Barriers

In the face of trade barriers and supply chain restructuring, open cooperation has become a shared call.

Müller emphasized that competition and cooperation are not opposites. "For the German automotive industry, China is not only an important sales market and sourcing destination but also a key innovation hub. Doing business in China's highly competitive market forces the German automotive industry to maintain its global innovation leadership."

Zhu Huarong proposed four initiatives:

• Establish a policy dialogue mechanism
• Build a shared safety governance system
• Create a collaborative intellectual property protection mechanism
• Share green development achievements

He noted that power battery safety, intelligent driving safety, and connected vehicle data security form the "safety triangle" of NEVs, urgently requiring the establishment of globally unified safety standards.

Chris Mason, CEO of the World Automotive Engineers Society, said in an interview: "Technology is iterating rapidly, and product cycles are constantly shortening, but it is difficult for standards to be updated at the same speed. It is not just the speed of technology R&D — the entire industrial support system must evolve in sync. This is the challenge of our era."

He added that collaboration is key to achieving global standard unification, and the automotive industry must rely on dialogue and long-term cooperation to move forward.