Sales of Electric Cars in China Are Predicted to Slow Down in 2026

KatadataOTO – Sales of electric cars in China are considered very positive in 2025. This is due to several factors.

For example, the prices offered are very competitive. Then there are incentives for people who want to purchase an electric vehicle (EV) through a trade-in scheme with conventional cars.

Furthermore, the Chinese government also exempts the 10 percent purchase tax on electric cars. This policy is valid until December 2025.

All the advantages above have made people flock to buy electric four-wheeled vehicles.

Photo: CarNewsChina

However, according to a report by Economist Intelligence on Monday (29/12), electric car sales in China are predicted to slow down in 2026.

“Several provincial governments have suspended the trade-in scheme this year, due to lower funding availability,” the online media wrote.

It was then explained that in 2026 the electric car market will face various pressures. Such as trade tensions, tariff shifts, and government regulatory uncertainty.

The conditions above are forcing manufacturers to rethink production, pricing, and market strategies.

A similar thing was also reported by Techinasia. This online media wrote that analysts revealed dozens of electric car manufacturers in China are under serious threat in 2026.

They are likely to close or reduce their operations next year. This is because industry growth is slowing and government incentives are ending.

“About 50 loss-making electric car manufacturers are facing pressure to scale down production or end their business,” they said.

If a sales decline does occur in 2026, this will certainly be the first phenomenon since 2020.

“Deutsche and JP Morgan estimate an overall vehicle sales decline of three percent to five percent,” they continued.

This situation is expected to worsen in the future. Considering that in January 2026 the purchase tax on electric cars will increase to five percent.

The analysts also explained that only a handful of manufacturers will survive. For example, BYD and Seres.

Photo: GAC Toyota

Because they are able to generate profits. Something that other brands cannot do.

“There will be more consolidation and a stronger push to enter overseas markets,” they asserted.

Of course, the decision above could have an impact on various countries, including Indonesia. Considering that in the country right now, many manufacturers from China are selling their products.