Passenger vehicle retail sales in China topped 1.7 million units in September, falling 24% year over year, amid a transition in demand toward new energy vehicles, according to preliminary data from the China Passenger Car Association released Saturday.

Vehicle wholesale figures slid 10% to 2.5 million, the association said.

Sales in September saw a higher base from the same month a year ago due to a rush from car buyers before subsidies were suspended in September 2025, according to the association.

In the fourth week of September, sales plunged 42% year over year amid the Mid-Autumn Festival holiday.

Gas-powered vehicles faced effectively zero organic demand during the month as oil prices rose by more than 830 yuan per ton in 2026 and consumer appeal for NEVs rose, according to the association.

While upstream raw material prices for NEV manufacturers have fallen somewhat, the car industry's "anti-involution" stance drove upstream prices, driving cost pressures for carmakers and squeezing profit margins for dealers, the CPCA said.

New energy vehicle retail sales slipped 12% year over year to 1.1 million units, while wholesale sales rose 11% to about 1.7 million units.

BYD's (HKG:1211, SHE:002594) sales rose to 456,713 units from 393,060 units, while Geely's (HKG:0175) grew to 188,800 units from 165,201 units. Tesla's sales of China-manufactured electric cars increased 5% year over year to 95,366 in September from 90,812, according to figures from the CPCA.

Retail penetration rate for NEVs was 67.1%, while wholesale penetration was 66.1%.