The market share of Chinese passenger vehicles in Europe has surpassed Japan's for the first time. The latest statistics from the European Automobile Manufacturers' Association show that in May, five Chinese automakers sold a total of 138,400 units in 31 European countries, up 65% YoY. Over the same period, six Japanese automakers' sales totaled 130,400 units, down 3% YoY.

[CPCA: China’s Passenger NEV Producer Wholesale Sales Estimated at 1.51 Million Units in June, Up 22% YoY] In June 2026, China’s passenger NEV producer wholesale sales are estimated to have reached 1.51 million units, up 22% YoY and 12% MoM, achieving double-digit growth on both a YoY and MoM basis, indicating that the new energy segment has entered a clear recovery path after earlier adjustments. This growth rate was significantly higher than the overall auto market over the same period, with NEVs becoming the core engine boosting growth in the passenger vehicle market.

★Macro★ 01 ★★ [State-owned Major Bank's 5-Year Personal Certificate of Deposit 'Reappears' with Annualized Interest Rate of 1.6%] Although over the past two years, mainstream major state-owned banks and joint-stock banks ceased issuing certificates of deposit with terms over 3 years. But just as H2 began, a state-owned major bank reintroduced them. On July 1, Bank of China announced on its official website that it would issue the first tranche of personal certificates of deposit for 2026, offering seven terms: 1-month, 3-month, 6-month, 1-year, 2-year, 3-year, and 5-year. As long-term certificates of deposit issued by nationwide commercial banks have largely disappeared from the market, the issuance by Bank of China this time means that 5-year certificate of deposit products from state-owned major banks 'reappear.' 02 ★★ [Central Bank: Net Injection of 200 Billion Yuan via Medium-Term Lending Facility (MLF) in June] The People's Bank of China (PBOC) announced on its official website today the liquidity injection through various central bank tools for June 2026. Data showed that in June, net injection via MLF was 200 billion yuan, net injection via standing lending facility (SLF) was 0 yuan, and net injection via other structural monetary policy tools was -137.2 billion yuan. Meanwhile, in open market operations, in June, net injection via government bond trading in the open market was 10 billion yuan, net injection via 7-day reverse repo was 582.6 billion yuan, net injection via central treasury cash management was 0 yuan, and net injection via reverse repos of other tenors was 300 billion yuan. ★Industry and Downstream★ 01 ★★ [NDRC's Liu Gang Leads Team to China Iron and Steel Association for Work Survey] To gain an in-depth understanding of the steel industry's development, on June 29, Liu Gang, Deputy Director of the NDRC Price Monitoring Center, led a team to CISA to conduct a work survey, and held discussions with Diao Li, Deputy Secretary General and Director of the Information and Statistics Department of CISA, as well as Li Xiaochuan and Li Baojun, Deputy Directors of the Information and Statistics Department. The two sides, considering the new characteristics of steel industry development at this stage, conducted in-depth exchanges on aspects such as price trends across the industry chain's upstream and downstream, compilation of price indices, and optimization of monitoring indicators. 02 ★★ [2025 Annual Dual-Credit Calculation Results for Chinese Passenger Vehicle Enterprises Released] Four departments, including the Ministry of Industry and Information Technology, the Ministry of Commerce, the General Administration of Customs, and the State Administration for Market Regulation, recently jointly announced the 2025 average fuel consumption and NEV credit status of Chinese passenger vehicle enterprises. In 2025, a total of 108 passenger vehicle enterprises in China produced/imported 24.629 million passenger vehicles (including passenger NEVs, excluding export passenger vehicles), with an actual average fuel consumption under WLTC conditions of 3.38 liters per 100 kilometers, average carbon dioxide emissions of 80.22 grams per kilometer, positive fuel consumption credits of 53.553 million points, negative fuel consumption credits of 9.412 million points, positive NEV credits of 21.94 million points, and negative NEV credits of 1.599 million points. 03 ★★ [Changsha One Commercial-Residential Plot Sold at Reserve Price of 165 Million Yuan] On July 2, Changsha auctioned one commercial-residential plot in Furong District, with a planned GFA of 28,109.20 sq m (commercial-residential ratio of 1:9), a plot ratio of 5, a starting price of 165 million yuan, and a starting floor price of 5,884 yuan per sq m. Finally, the local private enterprise Hunan Dayou Real Estate Development Co., Ltd. won the plot at the reserve price of 165 million yuan. 04 ★★ [Nanjing One Residential Plot Sold at Reserve Price of 570 Million Yuan] On July 2, Nanjing auctioned one residential plot in the Qilin Area of Jiangning District, with a planned GFA of 56,779 sq m, a plot ratio of 2.4, a starting price of 570 million yuan, and a starting floor price of 10,041 yuan per sq m. Finally, Nanjing Science and Technology Innovation Investment Co., Ltd. won the plot at the reserve price of 570 million yuan. 05 ★★ [South Korea Imposes Anti-Dumping Duties on Carbon Steel and Alloy Steel HRC Involving China] According to China Trade Remedies Information, on June 23, South Korea's Ministry of Economy and Finance issued Order No. 35, officially imposing anti-dumping duties on carbon steel and alloy steel HRC originating from China and Japan, with the duty rate for Chinese products ranging from 28.16% to 33.10%; meanwhile, it approved the price undertakings proposed by three Japanese enterprises and six Chinese enterprises, and will not impose anti-dumping duties on enterprises that comply with the price undertakings. The announcement took effect on the date of its issuance. ★ Other Hot Topics ★ ⭕ [China's State Flood Control and Drought Relief Headquarters Launches Level-IV Emergency Response for Flood and Typhoon Prevention in Hainan, Guangxi, and Guangdong] According to meteorological forecasts, the tropical depression over the South China Sea is expected to develop into a typhoon on July 2, make landfall on the eastern coast of Hainan Island on the afternoon or evening of July 3, and then make a second landfall on the coast of Guangxi or northern Vietnam on the afternoon or evening of July 4. As a result, it is expected that from July 3 to 5, parts of Hainan Island, Guangdong, and Guangxi will experience heavy to torrential rain, with localized areas seeing extremely heavy downpours. In accordance with the relevant provisions of the National Flood Control and Drought Relief Emergency Plan, the State Flood Control and Drought Relief Headquarters decided to launch a Level-IV emergency response for flood and typhoon prevention in Hainan, Guangxi, and Guangdong at 12:00 on July 2, and dispatched a working group to Hainan for frontline guidance and assistance. ⭕ [US Treasuries Rise as Weak Employment Report Dampens Rate Hike Expectations] US Treasuries rose after a weaker-than-expected US employment report prompted traders to scale back expectations of interest rate hikes by the US Fed in the coming months. The two-year US Treasury yield, which is most sensitive to monetary policy changes, fell 6 basis points to 4.11%, while the 10-year yield fell 2 basis points to 4.46%. Interest rate swaps showed that traders expected the probability of the US Fed raising interest rates at its meeting later this month to be around 20%, down from 33% before the data release. The market was pricing in fewer than two 25-basis-point rate hikes by March 2027. ⭕ [US June Nonfarm Payrolls Increased by 57,000, Far Below Market Expectations] US nonfarm payrolls increased by 57,000 in June (estimate: 113,000; prior: 172,000). Private payrolls rose by 49,000 (prior: 97,000; estimate: 107,000). Manufacturing payrolls increased by 3,000 (prior: a decrease of 2,000), matching expectations; the forecast range of 15 surveyed economists was a decline of 1,000 to an increase of 10,000. ⭕ [Saudi Arabia's Crude Oil Exports Approach Pre-War Levels] Saudi Arabia's crude oil exports are near pre-war levels; as of Wednesday, the kingdom exported 6.3 million barrels per day over a six-day period. *This report is an original work and/or compilation work exclusively created by SMM Information & Technology Co., Ltd. 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On July 1, BYD Company Limited released its production and sales report for June 2026. In June, BYD produced 403,246 new energy vehicles and sold 403,472, achieving monthly sales exceeding 400,000 vehicles. Among these, passenger vehicle sales reached 397,292 units, while commercial vehicle sales totaled 6,180 units. By power type, pure electric passenger vehicle sales reached 201,472 units, and plug-in hybrid passenger vehicle sales reached 195,820 units. In terms of exports, new energy vehicle exports totaled 175,300 units in June. On a cumulative basis, from January to June 2026, cumulative new energy vehicle sales reached 1,808,511 units, a year-on-year decrease of 15.72%; among these, cumulative passenger vehicle sales reached 1,777,375 units, and cumulative commercial vehicle sales reached 31,136 units.

According to customs statistics, Guangzhou exported over 120,000 vehicles worth RMB 13.295 billion in the first five months of this year, up 65.8% and 56.1% year‑on‑year respectively. Among them, exports of electric passenger vehicles reached 75,500 units valued at RMB 9.36 billion, jumping 92.8% and 88.5% respectively, making auto exports a key driver of the city's foreign trade growth. The rapid export growth is primarily attributed to Guangzhou's enhanced port capacity and service innovations. Nansha Port, equipped with seven berths of 10,000‑tonne class or above and an annual design throughput of over 3 million vehicles, operates 12 international ro‑ro routes. In the January–May period, some 192,000 vehicles were exported through Nansha auto terminal, with NEVs accounting for nearly half and posting growth of over 80%. Meanwhile, innovative models such as the "Guangzhou–Hong Kong Auto Export Express" have cut vehicle registration time from 14 days to 3 days upon arrival in Hong Kong, reducing per‑vehicle costs by more than RMB 2,000 and saving companies over RMB 12 million in total. The city has also issued the "Auto Export Guidebook" and regularly holds resource‑matching events to provide full‑process guidance for automakers.

Entering July, the traditionally recognized "off-season" for power batteries appears to be losing its relevance. According to the latest SMM data, power battery production in June continued its growth trajectory, up 9% MoM and over 65% YoY. In July, a month that typically sees a seasonal pullback, production schedules also maintained MoM growth of roughly 9%, displaying a rare "stronger-than-usual off-season" pattern across the industry. What is driving this counter-seasonal growth? Demand Side: PHEVs and EREVs Lead the Way, Commercial Vehicles Show Strong Momentum From the perspective of end-use demand, new orders for new energy vehicles remained robust, particularly for plug-in hybrid (PHEV) and extended-range (EREV) models, which continued to ramp up volume. With product advantages offering a balance of driving range and charging convenience, these have become key growth drivers in the current passenger vehicle market. Meanwhile, new model orders released by some automakers earlier are gradually feeding through to the battery segment, translating into tangible production schedule boosts. The commercial vehicle sector is equally noteworthy. Driven by sustained policy support, the electrification of logistics vehicles, light trucks, and heavy-duty trucks has clearly accelerated, with full life-cycle cost advantages becoming more pronounced in high-frequency operational scenarios. After entering July, commercial vehicle demand did not weaken seasonally but instead maintained a steady growth trend, providing strong support for high-capacity LFP battery cells. The LFP system continues to dominate this round of incremental growth — on one hand, benefiting from the continued volume ramp-up of mainstream A-class and below passenger vehicles, and on the other, receiving an additional boost from the dual drivers of energy storage and commercial vehicle demand. While the overall recovery pace for the ternary system lags behind that of LFP, marginal improvements in high-end BEV models, a new wave of export orders, and some export demand have also driven a certain rebound in ternary battery cell production among top-tier players, effectively supplementing overall industry output. Inventory Side: Low Inventories Drive Pre-stocking Window Forward Beyond direct demand-side drivers, inventory levels across the industry chain serve as another important supporting factor for this "stronger-than-usual off-season." Currently, overall inventory across the power battery industry chain remains at a relatively low-to-normal level (the inventory-to-sales ratio is about 1.3 months), leaving battery cell manufacturers with a thin safety margin for stockpiling. Against this backdrop, enterprises' willingness to actively build inventory has strengthened considerably — rather than waiting for the peak season to arrive and then making passive procurement under delivery pressure, it is better to lock in capacity and accumulate an inventory buffer ahead of time during the off-season window. It is particularly worth noting that this stockpiling activity is expected to continue through August, with the core logic being early positioning for the traditional "September-October peak season." Mainstream battery cell enterprises broadly assess that the end-use consumption peak from late Q3 to early Q4 will bring concentrated cargo pick-up demand. If inventory preparation proves insufficient by then, it will directly impact delivery capabilities and market share. Therefore, the current seemingly "excessive" production schedules are essentially forward-looking, strategic stockpiling actions. Outlook: Peak Season Stockpiling Logic Continues to Unfold, Production Hits New Highs With dual support from both the demand and inventory sides, power battery production is expected to extend its growth trajectory in August. Structurally, LFP will remain the core source of incremental growth, while ternary battery cell output is projected to stage a steady rebound as high-end models and export orders continue to improve. Driven by the combined forces of policy support, new model volume ramp-ups, and proactive stockpiling, a "stronger-than-usual off-season" for the power battery industry is likely to become a defining feature of H2 2026, laying a solid foundation for achieving the full-year production target. SMM New Energy Industry Research, Lithium Industry Analyst, Wang Zihan 021-51666914