BUSINESS

Volkswagen’s China Sales Drop 8% as EV Rivals Reshape Market

Published: Jan. 14, 2026 2:57 a.m. GMT+8

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The Volkswagen booth at the Guangzhou auto show on Nov. 26, 2025. Photo: VCG

Volkswagen Group’s annual vehicle sales in China dropped 8% in 2025 to 2.7 million units, as the German automaker continued to lose ground to local rivals in the new-energy vehicle segment, a setback that also weighed on its global performance.

Deliveries in China — Volkswagen’s largest market — dragged down global sales by 0.5% to just under 9 million vehicles, even as sales rose in most other regions outside North America.

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Explore the story in 30 seconds

Volkswagen's China sales dropped 8% in 2025 to 2.7 million units, with NEV deliveries falling 44.3% to 116,000 units.
EV sales surpassed ICE vehicles in China in 2025, but 96% of Volkswagen's China sales were still fuel-powered.
Volkswagen plans over 20 new NEV models for China in 2026 and is expanding exports to new markets, despite increased competition from local automakers.

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Who’s Who

Volkswagen Group: Volkswagen Group's annual vehicle sales in China dropped 8% in 2025 to 2.7 million units, losing ground to local rivals in New Energy Vehicles. Its deliveries in China, its largest market, dragged down global sales. While still China's top-selling foreign carmaker, Volkswagen has ceded overall market leadership to domestic companies. The company is heavily dependent on traditional fuel-powered vehicles, with 96% of its China sales in 2025 being internal combustion models.

BYD Co. Ltd.: BYD Co. Ltd. (比亚迪股份有限公司) is a Chinese domestic champion in the automotive industry. It has surpassed Volkswagen Group in overall market leadership in China. This shift highlights a broader change in Chinese consumer preferences towards new-energy vehicles, a market segment where BYD Co. Ltd. has excelled.

Geely Automobile Holdings Ltd.: Geely Automobile Holdings Ltd. is an automotive company that has overtaken Volkswagen in overall market leadership in China. Along with BYD Co. Ltd., Geely has become one of China's domestic champions, indicating a notable shift in consumer preferences towards local brands.

SAIC Motor Corp. Ltd.: SAIC Motor Corp. Ltd. is a Chinese automaker collaborating with Volkswagen. In 2026, they are co-developing and launching extended-range electric vehicles in China as part of Volkswagen's broader plan to introduce over 20 new energy vehicle models.

XPeng Inc.: XPeng Inc. is an intelligent electric vehicle manufacturer. The article mentions that Volkswagen is partnering with XPeng Inc. to develop intelligent electric models, which are expected to launch in China in 2026. This collaboration is part of Volkswagen's broader strategy to enhance its electric vehicle lineup for the Chinese market.

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What Happened When

2019：: Volkswagen’s sales in China peaked at 4.23 million units.

2023：: Volkswagen recorded a modest rebound in China sales.

2025：: Volkswagen Group’s annual vehicle sales in China dropped 8% to 2.7 million units.

2025：: Volkswagen’s global sales decreased by 0.5% to just under 9 million vehicles, mainly due to performance in China.

2025：: Retail sales of passenger vehicles in China reached 23.7 million units, with new-energy vehicles overtaking ICE cars in market share for the first time at 53.9%.