Volkswagen (VW) has reclaimed its position as China’s top-selling automaker during the first two months of 2026, while Toyota also made significant gains, overtaking local electric vehicle (EV) leader BYD, according to Reuters.
Data from the China Passenger Car Association (CPCA) shows that VW’s joint ventures with FAW and SAIC captured a combined 13.9% of the passenger vehicle market.
Geely followed closely with a 13.8% share, and Toyota’s partnerships with GAC and FAW accounted for 7.8%. BYD, which had overtaken VW in 2024, fell to fourth place with a 7.1% market share in January and February.
Industry experts attribute the resurgence of legacy automakers to the expiration of EV purchase tax exemptions and Beijing’s scaling back of subsidies for trading in electric vehicles. “As incentives fade, Toyota’s strength in hybrid EVs is drawing consumers away from plug-in models,” said Cui Dongshu, secretary-general of the CPCA. Local manufacturers heavily reliant on budget EVs and plug-in hybrids have been particularly affected by the reduced support.
BYD, Tesla’s biggest rival in China, recorded its steepest sales decline since the pandemic. In response, the automaker recently unveiled its first major battery upgrade in six years, aiming to revive demand in a market increasingly driven by value rather than aggressive price competition.
Meanwhile, VW is ramping up its EV ambitions. The German automaker has begun mass production of its first model co-developed with Chinese partner Xpeng and plans to launch more than 20 new electric vehicles in China this year.
