The automotive industry in China has undergone a remarkable transformation, evolving from a follower to a global leader in the realm of new energy vehicles (NEVs) and intelligent connected vehicles. This shift has not only redefined the cars themselves but also the way they are developed, marketed, and introduced to global markets. As China embarks on its 15th Five-Year Plan (2026-30) and strives towards its 2035 modernization goals, the country’s automotive sector is poised to set new industry standards.
With a history dating back seven decades, China’s journey in the automotive industry has been one of perseverance and innovation. From the production of its first automobile in July 1956 to becoming a global powerhouse, the country has redrawn the automotive landscape and established a distinctive presence. Today, one in every three cars sold worldwide is made in China, and two out of every three passenger vehicles sold in China are NEVs.
The rise of China’s NEV industry
The NEV industry in China has experienced exponential growth, with sales soaring from just 17,600 units in 2013 to 16.49 million in 2026. This growth has been accompanied by a significant increase in the penetration rate of NEVs, which climbed from 0.08 percent to 47.9 percent over the same period. This remarkable growth has given rise to a strategic emerging industry worth trillions of yuan.
China’s journey towards becoming a global leader in the NEV industry has been marked by a series of strategic decisions and technological advancements. In 2008, BYD launched the F3DM, the world’s first mass-produced plug-in hybrid passenger vehicle, ushering China into the era of consumer NEVs. However, the path to establishing a robust NEV industry was not without its challenges. Many domestic automakers remained hesitant about electrification, and debate over the technological path continued.
The role of government policies
The Chinese government has played a pivotal role in the development of the NEV industry. Since 2014, the Ministry of Industry and Information Technology and other government departments have introduced nearly 100 policy measures covering multiple aspects of the industry. These policies have provided broad support for the development of China’s NEV sector and have helped the country secure a voice in defining what an NEV is.
Zhang Jinhua, secretary general of the China Society of Automotive Engineers, emphasized the importance of accurately identifying technological trends in the auto industry. He stated, “If you compete on a track set by multinational companies and play by rules written by others, no matter how hard you work, you remain a follower. Only by accurately identifying technological trends in the auto industry, opening up new tracks and putting forward new definitions can China lead globally.”
The future of China’s automotive industry
As China looks towards the future, the automotive industry is poised to continue its remarkable growth. The country’s commitment to electric drive and intelligent connected vehicles has established a distinctly Chinese approach to the industry. This approach is built around the twin drivers of intelligence and connectivity, which are shaping the future of the automobile.
The Made in China 2026 plan, issued in May 2015, called for mastering core technologies in low-carbon, information-based, and intelligent vehicles. This plan was the earliest top-level plan among major economies to coordinate intelligent technologies, connectivity, and NEVs under a single framework. The China Association of Automobile Manufacturers released a Chinese definition, classification system, and technical architecture for intelligent connected vehicles, introducing a distinctly Chinese approach built around the twin drivers of intelligence and connectivity.
This shift has not only redefined the cars themselves but also the way they are developed, marketed, and introduced to global markets. As China continues to strive towards its 2035 modernization goals, the country’s automotive sector is poised to set new industry standards and reshape the global automotive landscape.
