The Zhitong Finance App learned that Cui Dongshu, Secretary General of the Passenger Transport Association, published an article saying that recently, with the expansion of the production scale of the car market and the increase in PPI, upstream lithium carbonate costs have risen, lithium battery export prices have continued to drop, domestic battery prices have skyrocketed, the problem of car companies not making batteries is serious, and car companies' profits have continued to decline. Looking at the downward trend in profit margins in previous years, profits in the automobile industry have declined significantly recently. Due to the obvious advantages of new energy policies supported by the policy, since they do not make batteries and have no voice, the profit pressure on mainstream car companies will still increase dramatically. As the country's anti-domestic countervailing efforts continue to advance, the promotion effect on improving profits in the upstream industry is gradually improving, and downstream pressure continues to be strong.
I. Core Data Views
From January to July 2026, in the face of multiple challenges such as the complex evolution of the international environment and domestic transformation pressure, the national economy started well, quality and efficiency improved, profits in the equipment manufacturing and high-tech manufacturing industries grew rapidly, and profits in the raw materials manufacturing industry grew by double digits, laying a solid foundation for the smooth operation of the economy throughout the year. In July 2026, automobile production was 2.53 million units, the same as the previous year; production of new energy vehicles was 1.55 million units, up 30% year on year, penetration rate 61%; fuel vehicle production was 980,000 units, down 27% year on year. The automobile industry's revenue in July 2026 was 888.7 billion yuan, up 8.3% year on year; cost was 795.7 billion yuan, up 10%; profit was 20.9 billion yuan, down 28% year on year; and the automobile industry's profit margin was 2.4%. From January to July 2026, automobile production was 17.61 million units, down 3% year on year; new energy vehicle production was 8.95 million units, up 10% year on year, penetration rate 51%; fuel vehicle production was 8.67 million units, down 14% year on year. The automobile industry's revenue from January to July 2026 was 6078 billion yuan, up 2.7% year on year; costs were 5405.8 billion yuan, up 3.8%; profit was 216.2 billion yuan, down 20% year on year; the automobile industry's profit margin was 3.6%. Compared with the average profit margin of downstream industrial enterprises of 6.5%, the automobile industry is still low.
In 2026, various regions vigorously promoted the implementation of the “two new” policies to gradually and effectively release the vitality of domestic demand, but the improvement in the efficiency of the automobile industry clearly lags behind other consumer goods. As the country's anti-domestic countervailing efforts continue to advance, the automobile industry is being severely squeezed upstream. The price problem is serious. Oil prices have skyrocketed, profits from non-ferrous metals and semiconductors have skyrocketed, end users have a serious wait-and-see mentality when buying cars, the operating pressure on car companies continues to increase, and high-quality development has been greatly impacted upstream.
Judging from sales margin trends over the years, the profit performance of the automobile industry has weakened in 2024. The sales margin was only 4.3%, a sharp drop from the historical normal level; in 2025, the industry's sales margin fell to 4.1%. The industry's sales margin fell further to 3.6% in January-July 2026 and 2.4% in July, better than the lowest monthly performance of 1.8% in December 2025. July of previous years was generally a time when profit margins were low. Fuel vehicle production declined sharply in July of this year, and profit pressure became prominent.
Since production and sales in the automobile industry are basically the same, the statistical caliber is consistent, and there is not much gap between production and sales, we use the output of the National Bureau of Statistics to estimate the Bureau of Statistics's bicycle economic indicators.
In January-July, overall industrial enterprise unit costs were under high pressure. The price of lithium carbonate has doubled, commodity prices are running high, and the pressure on raw material costs in the middle and downstream industries has increased. In January-July, the overall bicycle revenue of the automobile industry chain increased by 5.3% to 345,000 yuan (with repeated calculation of the industrial chain), bicycle costs increased by 6.5% by 307,000 yuan, bicycle taxes by 26,000 yuan increased by 6.3%, and the gross bicycle profit of the industrial chain by 12,000 yuan decreased by 19%.
The total revenue of the top ten industries above scale in July was 11.6 trillion yuan. Computer electronics manufacturing, electrical machinery, and electricity steadily ranked in the top three of the month. The electronics industry's revenue for the month surged 23% year on year, becoming the main driving force; the automobile manufacturing industry's revenue for the month was 888.7 billion yuan, down 9% from the previous month, falling to fourth place. Electricity growth led the month-on-month dimension, while industries such as coal, ferrous metal smelting, and oil and gas extraction experienced a small month-on-month decline in revenue, and the short-term prosperity of the industry was clearly divided.
The cumulative revenue of the top ten industries in the first seven months of 2026 was 80.9 trillion yuan. The cumulative year-on-year growth rate of electronics and non-ferrous smelting was impressive with a cumulative year-on-year growth rate of 18%, and the automobile manufacturing industry had a cumulative growth rate of only 3%. The highest growth throughout the year was concentrated in high-tech manufacturing and basic raw materials, and the cumulative revenue growth of industries such as ferrous metal smelting, recreational products, and non-metallic mineral products was negative year-on-year. Overall, the high-end equipment and electronic information industries continue to grow rapidly, the recovery of traditional heavy industries is weak, and the characteristics of the conversion between old and new kinetic energy are outstanding.
The total profit of the top ten profitable industries above scale in July was 634.1 billion yuan. Computer communication and electronic equipment became the core driving force for the month's profit with a very high year-on-year growth rate of 145%. Profits from coal mining and non-ferrous metal smelting also rose sharply year on year; automobile manufacturing and electric thermal profits fell 29% and 15% year on year, respectively, putting pressure on profits. Looking at the month-on-month increase in electronics and electrical machinery profits, chemical and non-ferrous smelting profits contracted month-on-month, and the profit boom of the industry diverged markedly in the short term.
The cumulative profit of the top ten profitable industries in the first half of 2026 was 4582.1 billion yuan. Computer communication electronic equipment and non-ferrous metal smelting increased by 99% and 89% year-on-year respectively, supporting profit growth in the first half of the year. Automobile manufacturing profits fell 21% year on year, and profits from electrical machinery and electricity and thermal power weakened simultaneously. The overall pattern showed a pattern of strong recovery in high-tech industries and the differentiation of old and new kinetic energy between traditional equipment and weak profits in the automobile industry.
II. Specific analysis
1. Revenue and profit structure of various economies
The cumulative revenue of the industry in 2017-2025 remained in the range of 105 trillion yuan to 139 trillion yuan for a long time. The manufacturing industry has always been an absolute pillar, accounting for about 90% of the revenue volume for a long time. In terms of ownership, the revenue scale of joint-stock enterprises led the way; the revenue scale of private enterprises rose steadily, and the volume of foreign companies, Hong Kong, Macao and Taiwan contracted slightly; the revenue statistics for the first half of 2026 were semi-annual data, with an overall total of 81 trillion yuan. Revenue from all industries and all types of ownership contracted in half. Overall revenue rebounded to 7% year over year. The manufacturing industry also maintained a 7% revenue growth rate. The recovery was strong.
On the profit efficiency side, the overall efficiency of the industry fluctuated between 6.2-8.7 trillion yuan from 2018 to 2025, and fell back to 4.6 trillion yuan in January-July 2026, but the efficiency growth rate rebounded sharply to 18%. Among them, the mining industry increased 35%, and the manufacturing efficiency growth rate reached 19%, becoming the core of profit restoration. By sector, the efficiency growth rate of the mining industry was as high as 35%, and the electricity, heat, and water supply industry turned slightly negative; in terms of ownership, the profit growth rate of joint-stock enterprises led the way by 24%, and profits of state-owned enterprises and private enterprises picked up at the same time. The growth rate of foreign-invested enterprises was only 1%, and the profit recovery efforts of different entities were clearly divided.
Revenue growth in the overall industrial sector has been steady this year, and profit performance has also been relatively divided. Among them, the revenue and profits of state-owned enterprises have fluctuated greatly in recent years. Upstream profits are squeezing downstream, mining companies are performing well, and profit growth is very strong.
2. Changes in revenue and profit structure
At present, state-owned enterprises are performing very well. The share of revenue and profit continues to grow, and the share of profit has reached 33%, an increase of 5 points. The profit share of private enterprises fell by 6 points to 25%, and the sales profit margin was lower at 4%. The decline in profits of private enterprises was quite obvious compared to last year.
K-type differentiation of profit margin indicators for operating income is mainly due to the high index values of the mining industry and state-owned enterprises such as coal, hydropower, etc. The profit margin of private enterprises is very poor. The profit margin of the manufacturing industry accounts for 75%. Excluding semiconductors, there has been a marked decline recently.
III. Specific industry analysis
1. Profit differentiation in the mining industry
With a high base and rising prices from January to July 2026, mining profits increased by 35% and still very good profits. The profit margin of the mining industry in January-July was also very good at 21%.
From January to July 2026, the profit margin of the non-ferrous industry soared to 40.6%, and the profit margin of the petroleum industry was 31.8%. Recently, the profit margin of the petroleum industry has increased astonishingly. Overall mining industry profits remain high. The impact on the downstream is huge.
2. The profit of the water and electricity industry remains high
The profit margin in 2026 is 5.7%. Electric heating and water is a highly profitable service industry. Among them, the profit margin of the electric power industry is 7%, which is at an all-time high. In 2026, the profit of the electricity industry fell by 8%, the profit of the water treatment industry increased by 2%, and the profit of the gas industry increased by 9%.
3. Upstream profit improvement
In 2026, the upstream industry experienced high sales revenue and profit growth, and in particular, the profit margin fell to 3.8%. Among them, sales margins, represented by non-ferrous metals, etc., have gradually reached a high level, and the steel industry's profit margin of 0.7% this year is still poor. The profits of industries such as chemical raw materials and non-ferrous metal smelting are quite good.
4. Midstream profit performance is relatively good
Sales revenue and profit growth in the midstream industry was good from January to July 2026. The sales margin of the midstream industry fell from 6% in 2018 to 4.2% in 2026, and has stabilized recently. Sales margins in major midstream industries have also declined in 2026. The benefits of shipbuilding and railways are good, and profits in the use of waste materials and non-metallic mineral products have increased significantly due to scrapping and renewal subsidies.
5. Gradual improvement of downstream profits
From January to July 2026, the overall profit of the downstream industry increased by 22%, and the profit of the computer communications industry showed an unusually good growth trend of 105%. However, the automobile industry's profit fell 20%, and the sales profit margin was 3.6% (9% in 2014), which is still lower than the overall downstream profit level of 6.5%, and also significantly lower than other downstream companies such as tobacco, alcohol, and pharmaceuticals.
Currently, the main high-profit industries are the tobacco, alcohol, and pharmaceutical industries, and the profits of the alcohol industry are much higher than those of other industries. Profits in the food industry are not strong, but there is also a significant year-on-year increase.
IV. Analysis of the automotive industry
1. The scale of the automobile industry continues to expand
In 2022, automobile production was 27.48 million units, with a year-on-year increase of 3%; production of new energy vehicles was 7.22 million, an increase of 98%, with a penetration rate of 26%; production of fuel vehicles was 2.06 million units, a decrease of 11%.
In 2023, automobile production was 30.11 million units, up 9% year on year; new energy vehicle production was 9.44 million units, up 30% year on year, penetration rate 31%; fuel vehicle production was 20.67 million units, up 2% year on year.
In 2024, automobile production was 31.56 million units, up 5% year on year; new energy vehicle production was 13.17 million units, up 39% year on year, penetration rate was 42%; fuel vehicle production was 18.39 million units, down 11%.
In 2025, automobile production was 34.78 million units, up 10% year on year; new energy vehicle production was 16.52 million units, up 25% year on year, penetration rate 48%; fuel vehicle production was 18.25 million units, down 1% year on year.
From January to July 2026, automobile production was 17.61 million units, down 3% year on year; new energy vehicle production was 8.95 million units, up 10% year on year, penetration rate 51%; fuel vehicle production was 8.67 million units, down 14% year on year.
In July 2026, automobile production was 2.53 million units, the same as the previous year; production of new energy vehicles was 1.55 million units, up 30% year on year, penetration rate 61%; fuel vehicle production was 980,000 units, down 27% year on year.
2. The automobile industry is under high pressure on efficiency
In July 2026, automobile production was 2.53 million units, the same as the previous year; production of new energy vehicles was 1.55 million units, up 30% year on year, penetration rate 61%; fuel vehicle production was 980,000 units, down 27% year on year. The automobile industry's revenue in July 2026 was 888.7 billion yuan, up 8.3% year on year; cost was 795.7 billion yuan, up 10%; profit was 20.9 billion yuan, down 28% year on year; and the automobile industry's profit margin was 2.4%.
From January to July 2026, automobile production was 17.61 million units, down 3% year on year; new energy vehicle production was 8.95 million units, up 10% year on year, penetration rate 51%; fuel vehicle production was 8.67 million units, down 14% year on year. The automobile industry's revenue from January to July 2026 was 6078 billion yuan, up 2.7% year on year; costs were 5405.8 billion yuan, up 3.8%; profit was 216.2 billion yuan, down 20% year on year; the automobile industry's profit margin was 3.6%. Compared with the average profit margin of downstream industrial enterprises of 6.5%, the automobile industry is still low.
The export price of lithium batteries fell 26% from 142,900 yuan in 2024 to 112,300 yuan in 2025, down 21%. In 2026, the 105,000 yuan drop was 11%. Among them, the average price of batteries exported from China in July was 106,000 yuan, down 3% from the previous year. The price reduction after tax rebates were reduced in April-July was a significant improvement over last year.
Recently, as the scale of production in the car market expands, PPI rises, upstream lithium carbonate costs rise, lithium battery export prices continue to drop, domestic battery prices have skyrocketed, the problem of car companies not making batteries is serious, and car companies' profits have continued to decline.
Looking at the downward trend in profit margins in previous years, profits in the automobile industry have declined significantly recently. Due to the obvious advantages of new energy policies supported by the policy, since they do not make batteries and have no voice, the profit pressure on mainstream car companies will still increase dramatically. As the country's anti-domestic countervailing efforts continue to advance, the promotion effect on improving profits in the upstream industry is gradually improving, and downstream pressure continues to be strong.