The Chinese entry-level electric hatchback market experienced significant declines in January 2026, following the expiration of long-standing purchase tax exemptions. This policy change triggered a reshuffling of the top-selling models, with BYD’s Dolphin and Seagull dropping out of the top three for the first time, according to data from Electric Planet News.
Market-Wide Slowdown
The broader trend indicates a clear slowdown in demand. All leading models reported double-digit month-over-month sales decreases. While the top two vehicles still exceeded 10,000 units sold, even the tenth-ranked model fell to just 2,200 units – a substantial drop from December’s numbers. This is critical because it signals a cooling effect after years of aggressive EV subsidy-driven growth in China.
Top Performers and Key Shifts
Geely’s Geome Xingyuan led the January charts with 29,007 units, despite a 19% decline. This demonstrates that even with reduced incentives, Geely maintains strong consumer appeal. SAIC’s MG4 jumped to second place with 10,007 units, benefiting from a 29% drop in December sales but moving up from sixth. The MG4’s recent release of a solid-state battery variant, priced around $13,812, likely contributed to its improved position.
BYD’s Decline and Emerging Trends
BYD’s Dolphin (fifth) and Seagull (sixth) experienced declines with 5,699 and 5,329 units sold, respectively. However, recent filings with the Ministry of Industry and Information Technology (MIIT) reveal that both models are now offering optional LiDAR configurations – a sign that even budget EVs are adopting more advanced driver-assistance technology. This trend is important because it suggests that consumers are willing to pay a premium for enhanced safety and convenience features.
Other Key Players
The Wuling Hongguang Mini EV dropped below 10,000 units (7,133) for the first time since its launch, while Wuling’s Binguo S followed with 6,077 units. Nio’s Firefly brand (eighth) continues to expand internationally, with 15% of its volume now coming from overseas shipments. The Arcfox T1 and GAC Aion’s UT rounded out the top ten.
Technological Upgrades at Lower Price Points
The data shows that manufacturers are aggressively integrating advanced features into vehicles priced between $8,287 and $13,812. The introduction of LiDAR and semi-solid-state batteries into this segment signals a wider accessibility of previously premium technologies. This is notable because it suggests that the Chinese EV market is maturing beyond price-driven competition towards feature-rich offerings.
Looking Ahead
The January slowdown is likely a temporary adjustment following the policy change, but February and March registration data will be crucial to determine whether these shifts are structural or seasonal. The long-term impact of the subsidy removal and the ongoing integration of advanced technologies will ultimately shape the competitive landscape of China’s hatchback EV market in 2026.
