KATHMANDU: Volkswagen has regained the top position in passenger vehicle sales in China during the first two months of 2026. The shift comes as EV incentives are reduced, impacting sales of electric and plug-in hybrid models.
Volkswagen’s joint ventures with FAW and SAIC secured a combined 13.9% market share. Geely followed closely with 13.8%. Toyota ranked third with 7.8% through its FAW and GAC partnerships.
BYD dropped to fourth place with a 7.1% share. The company saw its biggest sales decline since the pandemic. It had previously led the market in 2024 and retained the position in 2025.
According to the China Passenger Car Association, the decline in EV subsidies and the end of purchase tax exemptions have influenced buyer behavior. Many customers are shifting from PHEVs to hybrid models, particularly those offered by Toyota.
This change has affected local brands focused on budget EVs and PHEVs. These manufacturers have seen the sharpest drop in sales.
Recently, BYD introduced its first major battery system upgrade in six years. It remains to be seen if this will help recover its market position.
Meanwhile, Volkswagen has started mass production of a new EV developed with its Chinese partner Xpeng. The company plans to launch over 20 new EVs in China in the coming years.
