Microcars That Educated the Market: Is Decline Imminent?

In early June, when automakers were showcasing sales posters, SAIC-GM-Wuling's poster, although full of glory, also revealed the cruelty of the new energy market.

The poster stated that Wuling Hongguang MINIEV consecutively retained the global micro new energy vehicle sales champion, with cumulative sales exceeding 1.9 million units in 70 months.

However, in the domestic market, Wuling Hongguang MINIEV has lost its voice in the new energy market. People are more concerned with mid-to-large vehicles like Tesla Model Y, Xiaomi SU7, and Li Auto i6. Microcars like MINIEV with affordable prices are no longer regulars on the sales rankings.

According to statistics, Wuling Hongguang MINIEV sold only 36,000 units in Q1 this year, a 74% year-on-year decline. Third-party data shows May sales were 18,308 units, a severe drop from the previous monthly high of 50,000 units.

The sales decline of Wuling Hongguang MINIEV is not a simple product change, but a deep change in the domestic new energy market structure. Market demand adjustments have impacted this generation of national hero cars towards the periphery.

From Breaking the Deadlock to Returning to Rationality

Although new energy vehicles have developed for several years, the one that truly opened the market cannot avoid Wuling Hongguang MINIEV, this national model. Starting in 2021, A00-class models represented by Wuling Hongguang MINIEV grew rapidly, with market share in new energy vehicles soaring to 20% at one point.

It can be said that low-priced microcars were the first stop for many to get into electric vehicles, undertaking the role of market education.

However, when new energy vehicles entered a period of high-speed growth, the A00-class models that should have spearheaded market expansion fell behind first. According to statistics, the market share of microcars in 2025 was less than 10%. While new energy vehicle sales expanded, A00-class model sales shrank rapidly.

Specifically, Wuling Hongguang MINIEV sales in 2025 were 430,000 units, consecutively retaining the sales champion in the A00-class market. At the same time, Wuling, Changan, BYD, and Geely, the four automakers, occupied 93.9% of the microcar market share.

Of course, apart from Wuling, microcar sales of the other three automakers were also declining. Whether it is Changan's Lumin or Chery's QQ Ice Cream, their situation was similar to Wuling.

Entering 2026, the declining status of the microcar market still saw no improvement. CPCA data shows that from January to May 2026, wholesale sales of A00-class pure electric small cars plummeted 40%-55% year-on-year, and market share returned to normal levels of the fuel vehicle era.

At the beginning of listing, the microcar market seized the market share of fuel vehicles. Relying on precise market positioning and small, flexible body dimensions along with affordable prices, it quickly achieved new energy replacement in the microcar market, realizing complete substitution with 99% new energy penetration rate early on.

Of course, the rapid speed came with a cost. The market developed too fast and entered a saturation state in a shorter time.

From a global market perspective, the microcar market is not large except in some regions with policy protection. In 2025, 1.03 million microcars were sold domestically, which was the last push under policy promotion.

The market entered a boom period starting from 2020. After 5 years, the not-large market has already approached saturation. The cliff-like decline in Q1 now explains the problem.

Of course, apart from its own market approaching saturation, the entry of the microcar market into a contraction period is also the joint influence of multiple factors.

First is the impact of policy. In 2026, the purchase tax for new energy vehicles was adjusted to half collection. Meanwhile, subsidies for cars under the Two New Policies were also adjusted from fixed subsidies to subsidies based on vehicle price proportion. This caused microcars to lose the core price competition.

The days when cars could be bought for 10,000 to 20,000 yuan including national subsidies are gone forever.

Under price factor influence, A0-class models began to fully replace A00-class products. In Guangxi, a microcar advantage market, this substitution has been completed. The market share of A0 class has already leveled with A00 class.

While in the more economically developed Zhejiang region, sales of A0-class models were more than 6 times that of A00-class models. Under similar prices, space and configuration became choices consumers cared about more.

This sales data can be intuitively shown. In 2025, Geely Xingyuan sales reached 460,000 units, and BYD Seagull sales reached 310,000 units, indicating that the main market choice has transitioned from A00 class to A0 class.

Of course, the more important factor in the decline of the microcar market is still the inherent issues of new energy vehicles. Unlike fuel vehicles, if new energy vehicles want long range, they can only increase battery size. If the battery is large, the vehicle size naturally becomes larger.

It can be said that microcars have completed the important mission of increasing new energy vehicle penetration. Under the trend of market saturation, they can no longer shoulder the responsibility of incremental growth. Returning to rationality has become inevitable.

Turbulent New Energy Market

Of course, the market contraction of microcars, apart from various objective factors, is inseparable from the changes in the entire new energy market. Entering 2026, the domestic new energy vehicle market is undergoing the most profound transformation.

First is operational pressure. In Q1, the profit margin of the automotive manufacturing industry was only 3.2%, and retail sales declined by nearly 20%. Automakers need to consider how to survive better.

The profit margin of microcars is inherently very thin. According to statistics, Wuling Hongguang MINIEV gross margin was only 2%-3%. Such a gross margin is unhealthy for automakers.

At the same time, costs in all aspects of new energy vehicles are rising. Lithium carbonate prices, which have fallen for many years, are experiencing a rebound. According to market quotes, the June lithium carbonate futures price rebounded to 175,000 yuan/ton. In terms of chips, driven by the AI wave, automotive-grade chip price increases exceeded 100%.

The rise in raw material costs was directly transmitted to the market. Since the beginning of this year, only 20 brands have adjusted prices. Especially on higher-order intelligent driving versions, price increases exceeded 20%. The price war of many years is tending to end.

The stacking of multiple factors led automakers to choose to advance towards high-value products. Whether it is the MPV market or the Battle of Series 8 and Series 9, behind it is automakers choosing high-value models to improve operations.

In 2025, new energy vehicle sales at the 300,000 yuan level and above grew 47.2% year-on-year, far higher than the market average growth rate of 18.3%. This May, wholesale volume of B-class pure electric models grew 42% year-on-year, indicating the market is also shifting towards high-value models.

After cars pass electrification, intelligent demand is becoming the core of consumer car purchasing. Under the situation where space, range, configuration, and comfort are all demanded, the budget also rises. In 2025, the average transaction price of passenger cars dropped to 168,000 yuan. This May, it has already rebounded to 173,000 yuan, indicating that consumer car purchasing budgets have also increased significantly under the influence of high-end new energy models.

When there is no better outlet in the domestic market, going overseas seems to become the only choice for microcars.

Ultimately, the overseas market for Wuling Hongguang MINIEV is Indonesia. Through the CKD assembly model, Wuling Indonesia's factory annual capacity exceeds 150,000 units.

At the same time, the Latin American market is gradually becoming a new blue ocean. According to statistics, in 2025, Chinese electric vehicle sales in the Latin American market grew over 300% year-on-year. Experts predict that microcar exports in 2026 will reach 183,000 units, a year-on-year growth of over 40%.

The microcar market will present a dual-track pattern of "domestic marginalization, overseas growth point search" for a long time. In the domestic market, microcars will maintain a certain share through product segmentation, channel sinking, and policy dependence. In the international market, new growth points will be sought through exports and localized production.

Adjustments in the microcar market will push the domestic new energy vehicle industry towards a more mature and sustainable development stage, getting rid of the inherent impression of low-end and cheap, and moving towards markets with more value.

The microcar market is heading towards an end, which is even more of a necessary pain for the Chinese new energy vehicle industry to become mature. When electrification no longer simply relies on cheap microcars to maintain scale, the entire industry can truly return to the core track of technological upgrades, value creation, and long-term profitability.

The new energy market should also walk out of the era of relying on simple and crude ways to achieve sales, heading towards an era that is more complex but has higher value. For automakers and the market, new energy microcars have reached the moment to end.