China’s auto market continued to struggle, and last month only battery electric vehicles (BEVs) posted higher sales than a year earlier. Plug-in hybrids (PHEVs), range-extended electric vehicles (EREVs) and internal combustion engine cars all declined.

On Sept. 8 (local time), Electrek reported that China’s passenger-car retail sales in August 2026 totalled 1,541,000 vehicles, down 23.6% from a year earlier, based on data compiled by the China Passenger Car Association (CPCA). BEV sales, however, rose 0.8% to 698,000. They increased 7.9% from the previous month.

Models that also use engines performed poorly. PHEV sales fell 29.6% to 226,000, and EREV sales dropped 22.2% to 81,000. Total sales of new energy vehicles (NEVs), which include BEVs, PHEVs and EREVs, also declined 10.1% to 1,005,000. Sales of non-NEVs, including internal combustion engine cars and conventional hybrids, plunged about 40%.

NEV sales fell, but market penetration still hit a record 65.2%. That was nearly 10% higher than 55.2% in August last year. That was because sales of internal combustion engine cars fell much faster.

Exports offset weak domestic demand. Exports of China-made NEV passenger cars in August jumped 154.7% from a year earlier to 518,000 units. Their share of total passenger-car exports also rose to 58.4%.

Tesla struggled in China’s domestic market. Its August retail sales fell 12.4% from a year earlier to 50,047 vehicles, extending declines for a third straight month. It was the lowest August performance since 2022. Exports from its Shanghai plant, however, rose 38.7% to 36,119 vehicles.

In NEV retail sales by brand, BYD kept the top spot with 233,943 vehicles, followed by Geely with 110,560. Tesla ranked sixth.

With the China market shrinking overall, BEVs and exports appear to be emerging as a pillar for the industry.