Summary of China HDT Demand Update & 4Q25/2026E Outlook Industry Overview - **Industry**: Heavy-Duty Trucks (HDT) in China - **Expert**: Mr. Xie Guangyao, chief editor of CVWorld Key Points HDT Sales Performance - **September 2025 HDT Wholesale Sales**: 105,000 units, up 15% MoM and 82% YoY, attributed to low base effect, peak season for road logistics, and trade-in subsidies [2] - **HDT Exports**: 26,000 units in September, a 6% increase YoY [2] - **Domestic Insurance Sales**: 85,000 units, a 96% increase YoY [2] - **LNG HDT Insurance Sales**: Estimated at over 22,000 units, a 140% increase YoY, driven by a larger gas-diesel price gap [2] - **NEV HDT Insurance Sales**: Over 22,000 units in September, a 190% increase YoY, with NEV penetration at approximately 26.5% [2] - **Diesel HDT Insurance Sales**: Approximately 40,000 units, a 60% increase YoY [2] 4Q25 and FY25 Outlook - **4Q25 Monthly HDT Wholesale Forecast**: 85,000 to 95,000 units (October/November 90,000+, December ~80,000) [3] - **FY25 HDT Wholesale Volume Expectation**: 1.08 to 1.10 million units, with insurance retail at 780,000 to 800,000 units and exports at 305,000 to 310,000 units [3] 2026E Outlook - **2026E HDT Wholesale Volume**: Expected to decline to 950,000 units due to the diminishing impact of trade-in subsidies [4] - **Domestic Insurance Retail**: Anticipated at 620,000 to 630,000 units [4] - **Export Forecast**: 320,000 to 330,000 units [4] - **Trade-in Subsidy**: Likely to be extended into 2026, but with a marginal decline in policy effect [4] Regulatory Changes - **Phase-out of National V HDT**: Expected to begin in some areas next year, but large-scale phase-out in 2026 is unlikely as National VII HDT are not yet released [5] NEV HDT Sales Outlook - **2025 NEV HDT Sales**: Estimated to reach nearly 200,000 units with a penetration rate of around 25% [6] - **2026E NEV HDT Sales**: Anticipated decline due to subsidy reductions and market saturation, but penetration expected to increase to 26-30% [6] - **Future Projections**: NEV penetration could reach 35% in 2027-28 and 50% by 2030 [6] LNG HDT Sales Outlook - **2026/27E LNG HDT Penetration**: Expected to reach 30-35% [7] Profitability of NEV HDT - **Average Net Loss per NEV HDT**: Estimated at RMB 10,000 to 20,000 in 2025, improving to below RMB 10,000 in 2026 and turning profitable in 2027 [7] Export Outlook for LNG/NEV HDT - **Overall HDT Exports**: Expected to increase from 310,000 units in 2025 to 330,000-350,000+ units in 2026/27, driven by demand from Africa, Southeast Asia, Central Asia, and the Middle East [9] Autonomous Driving - **L2 and L2+ HDT Sales**: Expected to remain low this year (below 10,000 units), with potential growth to 50,000-100,000 units in the next three years [10] - **L3 and L4 Autonomous Driving**: Unlikely to be widely applied in HDT in the next three years due to technology maturity concerns [10]