Once a bestseller with annual sales reaching 554,000 units, the Wuling Hongguang MINIEV is now far removed from its peak period. According to data from the China Passenger Car Association (CPCA), in the first half of 2026, cumulative sales of the Wuling Hongguang MINIEV totaled 72,800 units, a decrease of nearly 100,000 units compared to the same period last year, representing a sharp decline of 57.5%.

This is just one facet of the broader downturn affecting the entire A00-segment market. In the first half of this year, retail sales of A00-class sedans reached 240,000 units, a year-on-year drop of 63%. Meanwhile, cumulative sales of passenger vehicles priced under 50,000 yuan were only 130,000 units, down 55% year-on-year. While the microcar market contracts rapidly, smaller cars in the A0 segment are showing a contrasting trend. In the first half of this year, retail sales of A0-class sedans hit 510,000 units, a 15% increase year-on-year. The A0-class SUV, the Leapmotor A10, launched at the end of March, quickly entered the mainstream model lineup, and in July, it became the best-selling SUV in China with 26,424 units sold, surpassing the Tesla Model Y (25,158 units).

Behind this shift is an upgrade in consumer preferences among small car buyers. Zhu Jiangming, founder and chairman of Leapmotor, stated during a group interview at the Leapmotor A05 launch: "The current A0-class users are essentially replacing the original A00-class users." This upgrade is not only reflected in their willingness to pay a higher price for a slightly larger vehicle with more space, but more importantly, they are willing to pay a technology premium for better range and intelligent features. Xu Jun, Senior Vice President and Chief Operating Officer of Leapmotor, revealed that in A10 orders, the lidar version accounts for over 50%. Zhu Jiangming added that 70% of A10 users opted for the high-range version with 500 kilometers or more. The demand for small cars hasn't disappeared, but the consumption logic of "spending 50,000 yuan on a car that just runs" is loosening. Some users who originally belonged to the A00 segment are shifting their budgets towards A0 products that offer longer range, more space, and enhanced intelligence.

However, this is not a story of a comprehensive recovery in the A0 market either. The growth in the A0 segment is being driven by a few hit models like the Leapmotor A10, MG4, and Wuling Bingo Pro, while many other models remain trapped in the inertia of a downward cycle.

Where the A00 Market Stalled and Why Consumers Are Moving Up

The most important competitive edge of micro electric vehicles has always been their low price. In July 2020, the Wuling Hongguang MINIEV was officially launched with a starting price of 28,800 yuan, making pure electric vehicles affordable for ordinary families. It didn't need long range, fast charging, or complex smart features; its primary purpose was to meet the needs of grocery shopping, school runs, and short commutes, thereby opening up a vast market for low-cost mobility. Subsequently, the number of microcars sold domestically once reached around 50 models. Models like the Changan Lumin, Geely Panda, Chery Little Ant, and Leapmotor T03 entered the market one after another, with these budget-friendly "chopped chili fish head" cars rapidly capturing lower-tier markets.

However, the low price that was once the foundation for the rapid expansion of microcars has now become a weakness limiting their further development. The first change came from the policy environment. The vehicle purchase tax policy for new energy vehicles (NEVs) issued by the Ministry of Finance, the State Taxation Administration, and the Ministry of Industry and Information Technology states that from January 1, 2026, to December 31, 2027, the purchase tax exemption for NEVs will be adjusted to a 50% reduction, levied at a rate of 5%. Taking a micro EV with a tax-inclusive price of 50,000 yuan as an example, consumers would need to increase their spending by about 2,200 yuan. For mid-to-high-end models, this cost can be absorbed by terminal discounts, financial schemes, or configuration value; but for price-sensitive consumers with a budget stuck between 30,000 and 50,000 yuan, a few thousand yuan is enough to change their purchase decision.

Cost pressures are also mounting simultaneously. The mandatory national standard GB 38031-2025, "Electric Vehicles Traction Battery Safety Requirements," which took effect on July 1 this year, imposes higher requirements for battery safety. Combined with rising raw material prices, the industry estimates that overall vehicle costs could increase by more than 5,000 yuan. Cui Dongshu, Secretary-General of the CPCA, has previously stated that the per-vehicle profit for A00-class budget EVs is less than 1,000 yuan. After the cost increase, it is foreseeable that many models will be discontinued, and automakers will concentrate resources on products that can more easily achieve scale and profitability.

The price squeeze from A0-class products is making the situation even more difficult for A00 models. Currently, the Geely Xingyuan's discounted price has dropped to as low as 61,800 yuan, and the starting price of the Wuling Bingo Pro is 56,800 yuan. The price gap between some A0-class and A00-class models has narrowed to between a few thousand yuan and ten thousand yuan. But these few thousand yuan bring more than just a change in body size. Consumers gain a five-seat layout, larger passenger and cargo space, a range of 300 to 500 kilometers, and more complete fast charging, safety, and intelligent features. For those originally planning to buy a microcar, the appeal of the lower price is fading.

Zhu Jiangming also stated in a media group interview at the Leapmotor A05 launch that the rapid shrinking of the A00 market reflects consumption upgrading. "The original A00-class users now want to upgrade to A0. This is definitely a gradual process of moving upwards," he explained, adding, "The current A0 users are essentially replacing the old A00 users."

The order structure of the Leapmotor A10 further illustrates that consumers buying A0 small cars are no longer just looking at the base model but are showing a strong willingness to pay a premium for higher-end versions with advanced technology. Xu Jun noted in a group interview that the best-selling versions of the A10 are the 505-kilometer range version and the lidar version, with the lidar version accounting for over 50% of orders. Zhu Jiangming added that 70% of A10 users chose the version with 500 kilometers or more of range. A similar shift is occurring with the MG4. Chen Cui, General Manager of SAIC MG's Brand Division, said in a media interview in May this year that while consumers remembered the MG4's 65,800 yuan starting price at its launch, its average selling price had already reached around 80,000 yuan after the Beijing Auto Show. The newly launched Leapmotor A05 follows the same philosophy. The A05 starts with a 400-kilometer range and the top trim reaches 500 kilometers and includes lidar. Leapmotor summarizes its development approach as "overqualified for the job": a small car no longer means low quality and low specs, but rather bringing configurations previously found in much more expensive models down to a price point under 100,000 yuan. A00-class cars, about to lose even their "cheap" advantage, are seeing their competitiveness rapidly decline against strong new A0 entrants.

A0 Market Warming Up Is Just a Win for a Few Hits

Interpreting the A0 market as a full recovery would lead to overly optimistic conclusions. CPCA data shows that in the first half of this year, cumulative retail sales of A0-class sedans reached 510,000 units, a 15% increase year-on-year; however, cumulative retail sales of A0-class SUVs were 580,000 units, a 7% decrease year-on-year. Although A0-class SUV retail sales in June reached 130,000 units, a 17% increase year-on-year, their cumulative performance has still not turned positive. This indicates that the improvement in the A0 market is localized, with growth concentrated in a few new products.

The Leapmotor A10 is the most typical example. Data from Autohome shows that the Leapmotor A10, launched in March, became the best-selling SUV in China in July with 26,424 units sold, surpassing the Tesla Model Y (25,158 units). The A10's pulling effect on the entire A0 SUV market is significant. According to CPCA data, retail sales of A0 SUVs in June of last year were approximately 111,100 units, with a net increase of about 18,900 units this year. The A10's single-model sales of 24,900 units are equivalent to 132% of the total net increase in this segment over the same period. If the Leapmotor A10's sales were excluded, June sales of A0 SUVs would be around 105,100 units, a decline of about 5.4% compared to the same period last year. This suggests that the growth generated by new models like the A10 partially serves to fill the sales gap left by other models.

The same pattern applies to A0 sedans. In June, retail sales of A0 sedans were approximately 100,000 units, a 4% increase year-on-year. Based on this growth rate, sales in the same period last year were about 96,200 units, meaning the actual net increase this June was less than 4,000 units. Data from Pacific Auto shows that the MG4 retailed only 10 units in June last year but, after its facelift this year, retailed 14,400 units in the same period, a sales volume roughly 1,440 times that of the previous year. Similarly, the Wuling Bingo Pro, also launched this year, retailed about 14,200 units in June. The combined sales increase from these two models reached 28,600 units, more than seven times the total net increase for the entire A0 sedan category. If the sales of the MG4 and Bingo Pro are excluded, the combined retail sales of other A0 sedans in June would be about 71,400 units, a drop of roughly 25.7% year-on-year.

The small car market has thus entered a more concentrated phase. The A00 "chopped chili fish head" cars once rapidly expanded their market through ultra-low prices, green license plates, and commuter needs, but are now being squeezed by policy changes, rising costs, and the downward price pressure from A0 products. And it's not all A0 models that are absorbing this demand, but rather a few hit products that can pack high-end configurations into a lower price bracket. However, a market propped up by a few hits is also more fragile. Once models like the Leapmotor A10, MG4, and Wuling Bingo Pro enter their decline phase, the growth of the A0 market could quickly lose its support.