Gasgoo Munich- The Xiaomi YU7 retains 82.5% of its value after one year, while the Tesla Model 3 holds 61.4% after three. In the same market and segment, the dominant players on the one-year and three-year lists have almost completely swapped places. This stark contrast is far from an isolated case in the "September 2026 China Automotive Residual Value Research Report," jointly released by the China Automobile Dealers Association (CADA) and Jingzhengu on October 9, 2026.
While overall residual values stabilized in September, the one-year and three-year rankings show a widespread misalignment across brands and powertrains. Popular new-energy models that topped the one-year list see a marked decline by year three, while traditional models that were less impressive initially gain the upper hand. The hierarchy among pure electric, plug-in hybrid, and internal combustion engine vehicles also shifts as the holding period lengthens.
This divergence between one-year and three-year data suggests residual value can no longer be judged by short-term hype alone. The real question worth asking is: Behind these contrasts, how is the anchor of automotive value being reconstructed?
Who's Gaining Value, Who's Losing It
Brand segmentation first reveals a pattern of "stability at the top, pressure at the bottom." Luxury brands saw a mild rebound in September, with Porsche taking the lead and Lexus remaining near the front. Mercedes-Benz, BMW, and Audi also improved, though Lincoln, Volvo, and Jaguar still trail the leaders. Among joint ventures, Japanese brands held the top three spots, with Toyota remaining first, while Honda and Mazda slipped slightly and Buick and Nissan rebounded. Domestic brands continued to decline, though GAC Trumpchi and Tank stayed near the top, while Li Auto, BYD, and NIO saw only modest dips.
But when the observation window is extended, the gap within the luxury sector proves far more drastic than monthly data suggests.
Image Source: China Automobile Dealers Association
According to the "September 2026 China Automotive Residual Value Research Report" (three-year vehicle age standard) jointly released by CADA and Jingzhengu, Porsche leads the luxury sector with a 57.0% retention rate, followed closely by Tesla at 56.3%. Meanwhile, Mercedes-Benz has fallen to 49.3%, BMW to 43.8%, and Audi to 42.3% — all three German luxury giants have dropped below the 50% threshold. At the tail end, Lincoln sits at 43.5%, Volvo at 36.0%, and Jaguar at just 28.9%. The chasm between leader Porsche and laggard Jaguar has widened to 23.2 percentage points. The gap in residual values among luxury brands is evolving from a "subtle difference" into a "fault-line divergence."
The story is similar for domestic brands. GAC Trumpchi and Tank secured the top two spots with three-year retention rates of 54.7% and 54.2%, respectively. In the three-year ranking for new-energy brands, Tesla claimed the top spot at 56.3%, with Tank following at 54.1% — the highest among Chinese brands. The Tank 500 New Energy and Tank 400 New Energy continued their dominance, taking the first two positions on the plug-in hybrid list with 62.9% and 58.0%. However, most domestic brands have yet to establish a similar consensus on brand credit. As competitive pressure from new car sales bleeds into the used market, pricing for existing inventory continues to adjust.
The divergence between pure electric and plug-in hybrid models reveals distinctly different patterns of value decay. In September, the three-year residual value of pure electric vehicles rose to 45.7%, marking a second consecutive month of gains. Although plug-in hybrids halted their sharp decline from the previous month, the gap between the two categories continues to widen.
On the surface, this is a numerical gap; at its core, it reflects a divergence in valuation logic. Consumers of pure electric models judge core value primarily around range and battery condition — a relatively clear anchor. Plug-in hybrids face a more complex scenario: rapid iteration in the new car market quickly amplifies the technological obsolescence of older models in terms of pure electric range and performance when the battery is low, expanding the room for depreciation.
Industry analysts point out that early waves of new-energy vehicles are entering the second-hand market in concentration. The average age of used new-energy transactions is about 3.4 years, with the share of "nearly new" cars aged one to three years rising significantly. With low residual values for older models and the difficulty of assessing battery health, dealers generally adopt a "fast in, fast out" strategy, making price suppression a common practice.
Another undeniable differentiation stems from the time dimension. In September, the one-year pure electric ranking was dominated by domestic brands, while Tesla swept the three-year list. One-year retention rates are often swayed by brand hype and new-car pricing strategies, whereas three-year rates serve as the true touchstone for brand credit, product reliability, and market liquidity.
What Anchors the Value of a Used Car?
To understand these divergences, we must return to a more fundamental question: What exactly anchors a car's second-hand value?
Image Source: Lexus
The reason Porsche and Lexus consistently lead in residual value lies not in standout product specs, but in their relatively stable terminal pricing systems — consumers have a clear expectation of "how much this car will be worth three years from now." By contrast, brands seeing accelerated declines in residual value share a common trait: frequent loosening of terminal prices. In the first five months of 2026, more than 30 internal combustion models saw price cuts. Take the BMW 3 Series as an example: the 2026 330Li M Sport Shadow Edition has an official guide price of 308,000 yuan, but with terminal discounts of roughly 95,500 yuan, the naked price drops to just over 200,000 yuan.
According to previous data from the China Automobile Dealers Association, the average three-year residual value of domestic joint-venture internal combustion vehicles has fallen to 43.12%. In 2020, that figure generally sat between 50% and 70%. Every time new car prices dip lower, the pricing benchmark for the used car market is dragged down with it.
Analysts note that under the new-car price war, some models are experiencing an inversion where acquisition costs exceed selling prices. The average inventory cycle for used cars has stretched from the normal 20 days to 45–60 days, squeezing both dealers' pricing power and profit margins.
Image Source: Tank SUV
In terms of price stability, the Tank brand serves as a positive case study for Chinese domestic automakers. Tank's product iteration rhythm is relatively restrained, its terminal pricing system is stable, and the hard-core off-road category fosters high user loyalty and relatively rigid demand in the used market. Wei Jianjun, chairman of Great Wall Motor, previously remarked that a vehicle's residual value and long-term reliability do far more to determine user experience and brand reputation than marketing rhetoric ever could.
Another underestimated variable is the transparency of valuation information. The divergence between pure electric and plug-in hybrids exists not only due to differences in technology but also because of a deeper layer of information asymmetry. As the core determinant of new-energy vehicle residual value, the power battery has long lacked a unified, verifiable method for assessing health status. There is no reliable ruler for measuring how much range has faded or how much value remains in the battery. When buyers cannot verify the true condition of a used new-energy car's most critical asset — the battery — they can only lower their offer to create a safety margin for that uncertainty.
The transparency of valuation information thus directly determines a car's pricing potential in the second-hand market. "Battery residual value has become the core of used new-energy vehicle pricing, forcing the market to establish stricter standards for battery health detection and evaluation systems," analysts conclude.
Image Source: Tesla
Tesla's lead in three-year residual value is largely because the brand itself has become a symbol of credit, reducing buyer concerns about battery decay and technological iteration. However, the effectiveness of this alternative anchor is limited — when brand credit is insufficient to cover battery uncertainty, valuation loses its mooring.
Among joint venture brands, the stability and predictability of valuation information are equally critical variables. Models like the Toyota Camry and Volkswagen Passat, which have stable iteration rhythms and deep reputations, show significantly better residual value performance than brands that frequently adjust their product lines. In the joint-venture mid-size sedan rankings, Passat took the top spot, followed closely by Magotan and Camry. To some extent, the stability and predictability of valuation information are more decisive for second-hand value than the product specifications themselves.
Rebuilding the Value Anchor: A Joint Effort from Institutions, Automakers, and the Market
Facing these divergences, the industry is building a response system across three levels — institutions, automakers, and the market — all moving in the same direction: rebuilding a predictable value anchor.
At the institutional level, the core task is improving valuation transparency. On September 15, 2026, the China Automobile Dealers Association held a seminar in Hangzhou to revise the "Technical Specification for Used Car Appraisal" national standard, incorporating the appraisal of new-energy vehicle three-electric systems into the national framework for the first time. Regarding new-energy appraisal, the revision adopts a structure of "general items + powertrain-specific items." Battery health indicators prioritize existing national standards for new-energy batteries, while battery safety status and health status are disclosed separately. The draft is expected to be completed by the end of this year and officially implemented next year.
At the data infrastructure level, the framework for a power battery "digital ID" is beginning to take shape. Using a 24-digit code as a carrier, it links 54 basic information items, 24 operation items, and 18 recycling items — totaling 96 data points that cover the full lifecycle of the battery from production to retirement.
Automakers' strategies reflect differing responses to the same problem.
Among luxury brands, Cadillac launched a "three-year, 80% buyback" program for its entire internal combustion lineup in June. Between the 12th and 36th months from the invoice date, consumers can sell their vehicles back to a manufacturer-partnered agency at up to 80% of the original invoice price and trade it in for a new vehicle of the same brand.
The policy writes details such as an annual mileage cap of 20,000 kilometers and deductions for bodywork repairs directly into the contract, using official brand underwriting to replace the uncertain valuation of the used car market.
Image Source: FAW-Volkswagen
Among joint venture brands, FAW-Volkswagen introduced a "one-year original-value buyback" policy for the Tayron L. Within 12 months of purchase, consumers can offset the cost of a new vehicle by the full invoice price of the original car. This policy has since been extended to the Tayron L PHEV.
Beyond these scattered attempts by automakers, the industry is calling for a more systematic official buyback framework. Ouyang Minggao, an academician at the Chinese Academy of Sciences and a professor at Tsinghua University, stated at a high-level forum on smart electric vehicles that the new-energy industry has reached a moment to prioritize asset value. He suggested establishing a strict official system for used vehicle buybacks, refurbishment, and sales to stabilize brand used-car prices, thereby supporting new-car prices.
At the market level, battery swapping offers an alternative solution that bypasses the difficulty of battery assessment. By physically separating the battery from the transaction, buyers need not assess battery degradation, and dealers do not need to reserve room for price cuts due to battery depreciation. The evaluation of the vehicle body's residual value thus returns to a logical framework similar to that of internal combustion vehicles.
Conclusion:
One-year residual values largely reflect current market heat, while three-year values test the long-term stability of brand credit and pricing systems. The former can be built in the short term through product strength and marketing; the latter can only be accumulated over time.
The divergence in September's residual value data is essentially a reconstruction of value anchors as the automotive market shifts from incremental expansion to stock competition. The new-car price war has weakened the effectiveness of brand credit as a valuation anchor, and the industry needs to find new support. Whether it is institutional progress in battery assessment standards and digital IDs, or automakers attempting buyback guarantees and maintaining pricing resolve, all are efforts to establish this new anchor.
