China’s Auto Industry Shifts from Scale to Quality
As a strategic pillar industry of the national economy, China’s auto sector serves as a key field for stabilizing growth, expanding domestic demand and fostering new quality productive forces. According to Xinhua News Agency, China’s auto production and sales both exceeded 34 million units in 2025, hitting a new record high. During the 15th Five-Year Plan period, the industry is steadily moving from “scale expansion” to “quality improvement” to enhance its competitiveness amid global industrial transformation.
Technological innovation is the core driving force for industrial breakthroughs, with the in-depth integration of intelligence and electrification reshaping the industry’s development pattern. Data shows that new energy vehicle (NEV) sales accounted for over 50% of domestic new car sales in 2025. NEV production and sales reached 16.626 million and 16.49 million units respectively, up 29% and 28.2% year-on-year, maintaining the global top position for 11 consecutive years.
Supporting facilities have been upgraded in tandem, with wider coverage of charging infrastructure and significantly improved charging services. Currently, China has built the world’s largest electric vehicle charging network, capable of supporting the charging needs of more than 40 million NEVs, and 19 provinces have achieved full coverage of charging facilities in every town.
With the development of new-generation digital technologies such as artificial intelligence, the auto industry is steadily moving from the “first half” of electrification to the “second half” of intelligence. From the approval of pilot programs for the first batch of L3-level conditional autonomous driving models to third-party technology suppliers like Huawei and Momenta providing “Chinese solutions” for global intelligent driving, the policy environment and technical schemes for China’s intelligent connected vehicles continue to mature.
Dual empowerment from policy guidance and market impetus has injected strong momentum into high-quality industrial development. Since the start of this year, China has further deepened the trade-in program for consumer goods, optimizing policies focusing on the auto sector. The subsidy method for auto trade-in has been adjusted from a fixed amount to a proportion of the new car’s selling price, guiding the auto consumption structure toward green, low-carbon and intelligent upgrading, and bringing more high-performance, high-value-added auto products into people’s lives.
Driven by technological iteration, experience optimization and brand upgrading, domestic brand passenger cars accounted for nearly 70% of total sales. In 2025, sales of Chinese brand passenger cars reached 20.936 million units, a year-on-year increase of 16.5%, demonstrating not only their strong market competitiveness but also the huge potential and development space of China’s auto industry.
The transformation and upgrading of the auto industry, from scale leadership to quality breakthrough, is a vivid practice of traditional industries moving toward innovation and excellence. NEV and intelligent connected vehicle enterprises are focusing on strengthening technological innovation to consolidate development advantages, accelerating technological breakthroughs and industrial application of solid-state batteries in the electrification field, enhancing independent R&D capabilities of automotive chips and operating systems in the intelligence field, and deepening brand connotation in brand building.
The 15th Five-Year Plan period is a crucial stage for China’s auto industry to move toward the high end of the global value chain. Automobile enterprises and upstream and downstream links of the industrial chain are striving to avoid “involutionary competition,” strengthen innovation-driven development, and promote the industry to develop in depth toward intelligence, greenization, integration and internationalization.
