Ahead of China’s Spring Festival holiday, the market typically enters a peak season for fuel-powered vehicles. China’s new energy vehicle (NEV) retail sales reached 119,000 units from Feb 1–8, up 42% year on year, according to the latest data from the China Passenger Car Association (CPCA). Over the same period, nationwide passenger vehicle retail sales totaled 328,000 units, increasing 54% from a year earlier and 37% from the previous month. Cumulative retail sales so far this year stood at 1.872 million units, down 7% year on year. Sales volume and growth rates of major retailers for February across three years (2024, 2025, and 2026). On the wholesale side, passenger vehicle shipments reached 284,000 units during the period, up 46% year on year and 3% month on month. Year-to-date wholesale volume came in at 2.257 million units, down 2% from a year earlier. Overall, demand in the first week of February remained relatively subdued at the start of the year. Wholesale volume and growth rates of major retailers for February across three years (2024, 2025, and 2026). Limited inventory transfers by automakers at the end of last year constrained the room for inventory and sales adjustments. The NEV segment continued to expand, although penetration rates edged lower. From Feb 1–8, NEV retail sales rose 42% year on year and 41% month on month to 119,000 units, with retail penetration slipping to 36.4%. At the wholesale level, NEV shipments reached 125,000 units in the same period, up 39% year on year and 3% month on month. The NEV wholesale penetration rate declined to 43.9%. On a cumulative basis, NEV retail sales totaled 715,000 units so far this year, down 14% year on year, while cumulative wholesale volume reached 989,000 units, up 1%. Structural shifts were more pronounced. In the first week of February, production of pure internal combustion engine (ICE) light vehicles nationwide climbed to 158,000 units, surging 276% year on year and 139% month on month. Combined output of hybrid and plug-in hybrid models reached 73,000 units, up 70% year on year but down 28% from the previous month. Ahead of China’s Spring Festival holiday, the market typically enters a peak season for fuel-powered vehicles, with demand released in a more concentrated manner. By contrast, NEVs saw limited incremental stimulus from purchase tax incentives during this phase.