Jun. 18 at 3:55 PM
$NIO founder & chairman William Li warned at the 2026 China Auto Chongqing Summit that China's auto industry has entered its "most brutal final stage," saying 2026 passenger-vehicle retail sales in China could fall -15% to -20% y/y
China’s auto industry has entered its most intense final stage, adding that this year has been the most challenging market environment he has faced since entering the industry
China’s passenger vehicle ownership has reached 370M units, which marks a shift away from rapid growth toward a stock-driven market w/ intensified competition
China cumulative domestic passenger vehicle retail sales this year stand at 7.327M units [down -20% y/y]
He urges the industry to prepare psychologically for a prolonged winter & to survive by building an integrated system spanning technology, supply chain, & after-sales service
Note: Nio delivered 150,526 cars in first 5 months of 2026 [up +68.7% y/y] driven by models like the ES8 - Li reaffirmed that Nio Inc expects to achieve an annual sales growth of +40% to +50% this year
China pure EV sales rose +3.9% y/y in May 2026, while traditional gas vehicles, plug-in hybrids, & extended-range hybrids dropped -40%, -20%, & -20% -
Note: June sales do not look promising thus far
China's NEV penetration rate reached 62.9% & of pure EV models in the overall powertrain market has climbed to 42.2%
LI believes this trend of transitioning to pure electric vehicles is irreversible. With the rapid popularization of charging and battery swap infrastructure, the experiential benefits of pure electric models are significantly improving.
Li emphasized that the auto industry is a marathon on a muddy road. During this challenging transition period, there are no miracles or shortcuts to quick victories. Companies must build solid foundational skills & carry out company-wide operational transformations centered around creating user value
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