China's automotive market demonstrated robust growth in July 2025, with passenger vehicle sales rising 6.3% year-over-year (y/y) to approximately 1.83 million units, setting a new record for the month according to the China Passenger Car Association (CPCA). However, sales fell 12.4% month-over-month (m/m), reflecting a typical midsummer slowdown. New energy vehicle (NEV) sales showed a mixed trend: while NEV retail sales declined 11.2% m/m to 987,000 units, they increased 12% y/y, accounting for 54% of total passenger vehicle sales. Industry association data indicated that overall vehicle sales in China grew 14.7% y/y in July to about 2.59 million units, with production up 13.3% y/y to 2.59 million units. NEV production surged 26.3% y/y to 1.24 million units, and NEV sales rose 27.4% y/y to 1.26 million units, representing nearly half (48.7%) of all new car sales. Exports of passenger vehicles reached 575,000 units in July, increasing 22.6% y/y, with NEVs driving much of this growth; overseas NEV shipments rose 84.6% y/y to 1.31 million vehicles, making up over one-third of total exports. Commercial vehicle output and sales also saw solid year-on-year growth, with output increasing 16.3% to 298,000 units. Leading automakers such as Dongfeng Motor reported a 35.5% increase in NEV sales to 249,571 units in the first seven months, despite an 8.9% decline in overall car sales. The market's strength was supported by record-high electric vehicle incentives in July, averaging 17.5% of the average transaction price, which contributed to July becoming the second-best month ever for EV sales. Globally, EV sales grew 21% in July, with China’s growth slowing but Europe’s surging 48%. Notably, SUV models outsold sedans among NEVs in China, with top sellers including the M8 and M9 models.