New Energy Vehicles Ready to Reap Rewards after Over 30 Years of Strategic Layout – 36Kr
In 1991, China included the research and development of electric vehicles in the “Eighth Five-Year Plan” scientific and technological research project, kicking off the long journey of the new energy vehicle industry. Over the past three decades, through continuous policy support and market cultivation, China’s new energy vehicle industry has achieved numerous leaps and transformations.
In October 2025, the sales volume of new energy vehicles in China for the first time exceeded 50% of the total vehicle sales, surpassing traditional fuel vehicles.
Undoubtedly, the rapid growth of China’s new energy vehicle industry is inseparable from strong policy support. Since 2014, the policy of exempting purchase tax has been extended four times, providing continuous impetus for the rapid expansion of the new energy vehicle market.
These policy dividends are precisely targeted at fuel vehicle users who want to change their cars, accelerating the process of consumers switching from fuel cars to electric cars.
Chen Shihua, the deputy secretary-general of the China Association of Automobile Manufacturers, pointed out that the new energy vehicle market has achieved relatively high growth since the beginning of this year. On the one hand, it benefits from the continuous effectiveness of the trade – in subsidy policy. On the other hand, the adjustment of the purchase tax policy next year has prompted some consumers to buy cars in advance.
The guiding role of policies has always been crucial. It provides clear expectations for enterprises and injects strong impetus into the market. Data in October 2025 shows that the monthly sales volume of new energy vehicles reached 51.6% of the total new vehicle sales. Behind this figure lies a fundamental change in the Chinese automotive industry.
The era when people used to default to buying fuel cars is really coming to an end.
This historical leap is not only reflected in the domestic market but also in the export field. In the first ten months of this year, the export volume of Chinese new energy vehicles reached 2.024 million, while the export volume of conventional fuel passenger cars decreased by 7%. The increase and decrease clearly show the fundamental change in the competitiveness of the Chinese automotive industry.
As the industry matures, policy dividends are gradually withdrawing. According to the announcement jointly issued by three ministries, starting from January 1, 2026, the policy of exempting purchase tax for new energy vehicles will be terminated and replaced by a 50% reduction. The actual tax rate will be 5%, and the tax reduction for each new energy passenger car will not exceed 15,000 yuan.
Meanwhile, it is still unclear whether the trade – in policy, which significantly boosts automobile consumption, will be continued.
Behind the policy decline is the inevitable logic of the industry’s transformation from policy – driven to market – driven. Subsidies are short – term regulatory measures during periods of market instability or weak economy. They can only solve short – term problems and cannot eliminate the uncertainties in the long – term development of the industry. When the subsidy cushion is gradually removed, the competition logic of the industry will inevitably shift from policy – dividend – driven to product – value – driven.
Actually, in the second half of 2025, the national government issued a number of new regulations targeting industry chaos. On November 13, the “Technical Conditions for Safety of Motor Vehicle Operation” drafted by the Ministry of Public Security was open for public comments. In response to the frequent safety problems of new energy vehicles, clear restrictions were imposed on electric door handles, assisted driving, and acceleration from 0 to 100 km/h.
The draft requires that passenger cars should be in the default working state with an acceleration time from 0 to 100 km/h of no less than 5 seconds after each power – on. It also requires that pure – electric and plug – in hybrid passenger cars should have the function of suppressing accidental accelerator pedal depression.
For electric door handles, the draft added more detailed requirements to ensure that after an accident, the doors on the non – collision side can be opened through the outside door handles. More importantly, the draft clearly requires that “when the power battery experiences thermal runaway, it should not catch fire or explode within 2 hours”, targeting the biggest safety hazard of electric vehicles.
If all these regulations are implemented, they will become the strictest motor vehicle safety technical regulations in history, promoting the industry to move from barbaric growth to a more moderate and healthy development path.
In the export field, supervision is also being strengthened. On September 26, the Ministry of Commerce, the Ministry of Industry and Information Technology, the General Administration of Customs, and the State Administration for Market Regulation decided to implement export license management for pure – electric passenger cars. The announcement will be officially implemented on January 1, 2026.
On November 14, the four departments issued the “Notice on Further Strengthening the Management of Used – Car Exports”, strictly controlling the export of new cars in the name of used cars. The new regulation requires that starting from January 1, 2026, enterprises applying to export vehicles registered less than 180 days ago must submit a “Confirmation Letter of After – Sales Maintenance Service” issued by the vehicle manufacturer. Vehicles without the above materials will not be issued export licenses.
These policies precisely target the long – standing problems in the industry. Previously, some enterprises registered new cars as “used cars” for export to avoid brand authorization and product certification requirements for new – car exports, forming a gray operation chain of “counting as used cars in China and new cars overseas”.
As the “real – money” preferential policies gradually decline, the competition in the domestic new energy vehicle market is returning to its essence, shifting from “price war” to “value war”. Tang Xuxia, the chief analyst of the automotive industry at Guosen Securities, said that the new energy vehicle industry has entered the middle and late stages of the growth period, and branding and globalization are two important paths to avoid involution.
In addition, intelligent driving is accelerating, and general artificial intelligence is expected to reshape the automotive industry landscape. 2025 is known in the industry as the “Year of Universal Intelligent Driving”, which actually involves the competition for the right to define the industry.
Huawei is trying to seize the right to define high – level intelligent driving, linking its ADS 3.0 system with safety and usability to build a moat for its high – end brand. BYD, on the other hand, takes the route of technology popularization. Some institutions predict that it will introduce intelligent driving to models priced at around 100,000 yuan. Both routes have their markets and are promoting the Chinese new energy vehicle industry to a higher level.
From the “Eighth Five – Year Plan” to 2025, after more than three decades of long – term cultivation, China’s new energy vehicle industry has finally reached a historical turning point. In the initial stage, through the “liberal entry” strategy of universal subsidies and relaxed access, we successfully stimulated market vitality, cultivated the most complete industrial chain and the most active market segment in the world, and achieved a zero – to – one transformation and “changing lanes to overtake”.
However, barbaric growth has been accompanied by problems such as involution, safety, and reputation risks. Now, with the decline of purchase tax exemptions and the early termination of trade – in subsidies, the “nurturing period” of policies has ended. At the same time, the introduction of the “strictest new regulations” such as the “Technical Conditions for Safety of Motor Vehicle Operation” is implementing the “strict exit” standard in terms of safety, quality, and export order, driving out inferior products and forcing industrial upgrading.
This “tightening of the net” is not an end but a sign that the industry is officially moving from the policy – driven greenhouse to a new stage driven by the market and rules. The national strategic layout has completed the seeding and cultivation, and the future direction will be determined by the mature market, strict supervision, and the real core competitiveness of enterprises.
As many industry leaders have said, in the next few years, the top six automakers may account for more than 80% of the market share. The qualifying round is over, and the decisive battle has just begun. China’s new energy vehicle industry is bidding farewell to its reckless growth in its youth and entering the rational and responsible stage of adulthood.
This article is from the WeChat public account “Automobile Community” (ID: iAUTO2010). Author: Yang Jing, Editor: He Zengrong. Republished by 36Kr with permission.
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