中国汽车又一个软月——国内销量同比下降20%，电动车渗透率保持稳定
Chinese Autos: Another soft month — Domestic sales -20% YoY,EV penetration holds at 61%; XPEV and LI model updates China auto wholesale -4.2% YoY in May, with domestic retail volume -20.0% andretail SAAR declined to 19.2mn units.We track mandatory first-time auto insurancevolumes in China, which we believe gives the most accurate read on retail sell-through. Mayretail passenger vehicle sales totaled 1.51mn units, -20.0% yoy. The May retail SAAR of19.2mn units is lower than 19.6 mn in April 2026 and our estimate of normalized annualdemand of c.22mn units. May continued to reflect demand pulled forward by the 2024–2025 Eunice Lee, CFA+852 2123 2606eunice.lee@bernsteinsg.com May EV penetration edged higher to 61.0%,with BEVs accounting for 41.9% and PHEVs19.1%. EV sales declined -5.1% YoY, with BEVs up +8.3% and PHEVs down -25.4%. Thecontinuous strength in EV momentum suggests consumers are gradually adjusting to thehigher purchase tax (raised to 5% from January 1, 2026, vs. nil. previously), alongside theimpact of newly launched EV models that offer stronger pricing and product competitiveness.Rising gasoline prices also boost the operating economics of EVs. BYD Group reach 198kunits with market share at 21.4%. Geely Group ranked second with 111k units and 12.0% Exports grew +73% yoy in May, with ICE +38% and EV +119%.Exports made up 35.9%of total PV wholesale, partially offsetting the weak domestic demand. BEV & PHEV exportscontributed c.55% of total export volume. Chery continued to lead with 179k units (+79%yoy), followed by BYD with 156k (+85%) and Geely with 84k units (+180%). Following a review of recent performance, we lowered our price targets for both XPengand Li Auto while maintaining Market-Perform ratings.For XPeng, we lowered pricetargets to US$20.00 for XPEV.US(Old: US$22.00)and HK$78.00 for 9868.HK (Old: HK$86.00), based on a 1-year forward EV/sales multiple of 0.8x(previously 1.0x),reflecting weaker earnings visibility amid elevated AI investments. While we acknowledgeXPeng’s strong autonomous driving capabilities, and meaningful progress in robotaxi andhumanoids, near-term monetization remains limited. That said, we turn tactically positiveon upcoming MONA launches. The MONA brand is well positioned in the mass marketwith strong tech at accessible prices: the M03 sedan has shown resilient volumes, theL03 compact SUV (launching in July) marks its SUV entry, and the planned L05 mid-largeSUV should further refresh the lineup, support traffic, and drive interest.For Li Auto, we BERNSTEIN TICKER TABLE PRICE TARGET CHANGE / ESTIMATE CHANGE IN BOLD Source: Bloomberg, Bernstein estimates and analysis. INVESTMENT IMPLICATIONS We maintain a cautious outlook for the sector. The reduction in subsidies and a 5% purchase tax hike on EVs are expected toslow market momentum. This follows strong demand pulled forward into 2024-2025 and a high comparison base, while macroheadwinds and weak consumer sentiment persist. The industry will also face pressure from material cost inflation headwinds.We expect industry wholesale volumes to reach 28-29 mn units, falling 4-8% yoy. We forecast domestic retail demand of The long term secular growth outlook for EVs remains intact and even though EV transition has come to the mass adoptionphase in China, we forecast domestic EV sales growth will be c.5-10% for 2026 and drive EV penetration to 61%. We believecompetition within the domestic market will remain intense and overseas markets are increasingly important as a strategicgrowth opportunity. For our EV names, we rateBYD and Xiaomi Outperform, andXPeng, Li Auto, and NIO Market-Perform. Recent research highlights: 4 Jun 2026 - China Smartphone Tracker (April): Pressure spreading to mid-end & price hikes facing resistance 3 Jun 2026 - EV TRACKER - April 2026: New markets lead recovery in global EV sales 29 May 2026 - Li Auto: Q1 margin slump on i6, widened losses; International expansion accelerates but turnaround unclear 29 May 2026 - XPeng: Q1 Resilient gross margin; Bullish tone on GX 27 May 2026 - Xiaomi Q1: Resilience on display amid memory cycle; fundamentals reinforced — reiterate Outperform 22 May 2026 - NIO: Q1 clean beat, Q2 strong guide — mix wins, R&D risks 19 May 2026 - Chinese Autos: April SAAR 19.6mn units; Volumes -20% yoy, ICE slumps (-34%), while EV surges (60%penetration) and export robust (+85%) 18 May 2026 - China Autos Export Tracker: Q1 2026 exports +63% yoy, EV surges with BEV +113% and PHEV +146%;Chinese brands extend global footprint 11 May 2026 - China Smart Driving Chips Tracker (1Q26): NOA penetration temporarily dropped to 32% with weaker EV sales VALUATION COMPS TABLEASIAN AUTOS DETAILS CHINESE AUTOS RETAIL SELL-THROUGH WAS 1.51MN UNITS, -20.0% YOY, IN MAY 2026 Chinese autos retail sales, as measured by mandatory first-time insurance volumes, came in at1.51mn units in May2026, -20.0% yoy. Retail SAAR for May 2026 registered at 19.2mn units, lower than 19.6 mn in April