China’s New Energy Vehicle Revolution: Center of Gravity for Global Mobility
16.09.2025
Original Publication
ElectricVehicles
FutureOfMobility
NextGenAutomotive
ChinaNEV
China’s new energy vehicle (NEV) industry is at the epicenter of a historic transformation, reshaping the global auto industry with unprecedented speed and scale. Since 2020, China’s NEV market has expanded at a compound annual growth rate (CAGR) of 64%, soaring from 1.32 million units in 2020 to an expected 15.5 million in 2025
This is not just another chapter in automotive history; it is a fundamental rewrite. Powered by bold government policy, deep supply chain integration, and relentless innovation from domestic champions, China has become the gravitational center of global mobility. As NEVs shift from niche to mainstream, China is not simply adopting electric vehicles, it is defining the trajectory for the world.
Continue reading to discover how China’s EV industry is transforming the future of mobility.
Scale and Speed: China’s Ambitious Targets
No other market rivals China’s ambition or capability in accelerating the transition to electric mobility. As of September 2025, the Chinese government, led by eight departments including the Ministry of Industry and Information Technology, released a sweeping plan targeting 15.5 million NEV sales out of a broader goal of 32.3 million total vehicles for the year. These targets are more than statistical milestones, they are policy-driven cornerstones shaping the world’s largest auto market and setting new global standards for scale, speed, and sustainability.
The result is a market evolving at breakneck pace: from 2020’s modest base to an estimated 15.5 million NEVs in 2025, the transition represents a paradigm shift not just domestically, but for the global industry. Such relentless growth is testament to the centrality of China in both setting and achieving aggressive decarbonization and innovation objectives.
China’s Global Lead in NEV Sales
China’s leadership is nowhere more evident than in its contribution to worldwide NEV sales. From January to July 2025, China accounted for a staggering 61% of global EV sales, more than the rest of the world combined, according to RhoMotion data. This supremacy has profound implications: as the nexus of supply chains, manufacturing capacity, innovation, and policy, China’s momentum is recasting the competitive landscape in real time.
Emerging from a period where NEVs were peripheral products, China’s rapid expansion reflects government coordination, battery supply chain mastery, and a highly competitive domestic market. With over 55% of all new car sales being electric as of August 2025, the market has crossed a critical tipping point identified by observers and analysts, marking the shift from early-stage growth to mass-market dominance. This ratio is projected to accelerate further as NEV penetration (especially among BEVs) intensifies and as infrastructure, incentives, and consumer preferences increasingly align.
Battery Electric Vehicles Take the Lead
Among NEVs, battery electric vehicles (BEVs) are driving sector growth and technological differentiation. In August 2025, BEVs represented 62.3% of the total NEV market, with sales up 17.2% year-on-year, highlighting China’s adeptness at scaling next-generation powertrains. In contrast, plug-in hybrids (PHEVs) comprised 28.5%, down 7.3% year-on-year, a sign of waning momentum as automakers and policy tilt more decisively toward full electrification.
The gradual decline of PHEVs is noteworthy. While plug-in hybrids helped bridge gaps in infrastructure and consumer confidence over the past several years, China’s focus on BEVs is now accelerating. Off-the-shelf battery advancements, cost reductions, and rapid expansion of fast-charging infrastructure support this pivot, setting the stage for PHEVs to be steadily phased out as BEV adoption surges At the same time, China is advancing rapidly in AI and autonomous-driving capabilities, embedding intelligent features into mainstream vehicles. Together, these trends amplify China’s innovation leadership, not only in cell chemistry, vehicle efficiency, and energy management, but also in smart mobility and driverless technologies.
Domestic Dominance and the Rise of Local Champions
Central to the Chinese EV story is the rise, and sustained dominance, of domestic brands. Through July 2025, Chinese automakers accounted for nearly 69% of total auto shipments, commanding over 80% market share in NEVs. This is more than a statistical quirk: domestic players have become the engine powering all market growth.
National champions like BYD, Geely, Xiaomi, Xpeng, and Leapmotor have not merely captured local demand; they have originated products suited to mass-market adoption, often outperforming and out-innovating their foreign rivals. Advanced design, localized software, and cost-effective systems have enabled these OEMs to rapidly scale production and compete aggressively on both price and quality. Their success demonstrates a virtuous cycle, deep supply chain integration, brand recognition, and government support combine to reinforce market strength.
Growing brand equity helps Chinese automakers fend off competitive threats and maintain resilience even during phases of macroeconomic volatility or regulatory uncertainty. In the NEV space, their grip is even stronger, with Chinese brands comprising over 80% of domestic NEV sales, an extraordinary figure compared with international peers in any auto segment.
The Retreat of Foreign Automakers
The flip side of domestic ascent has been a sustained and accelerating decline in the fortunes of foreign OEMs. According to the China Association of Automobile Manufacturers (CAAM), German OEMs saw sales fall 8.2% year-on-year through July 2025; Japanese brands slid 7.0%, and U.S. automakers dropped 3.1%. This is not a new trend but an entrenched reality since 2020, reflecting the challenges foreign brands face: competitive lag, higher costs, regulatory hurdles, and, most critically, a misalignment with local consumer preferences.
Market share is no longer broadly competitive; instead, foreign brands are increasingly niche, struggling to defend even core offerings. The operational and strategic disadvantages are deepening, making any significant recovery or reversal appear unlikely.
Tesla remains a notable exception. As the only non-Chinese manufacturer consistently ranking among the top 10 NEV producers, the company’s path-breaking strategy, local production, supply chain integration, and brand cultivation, has allowed it to compete effectively amid Chinese giants.
China’s NEV Market Structure: Brand Share Breakdown
Examining the competitive landscape further, the market is characterized by dominant and emerging Chinese brands. As of Jan–Jul 2025, the NEV market share by leading brand is as follows: BYD (29%), Geely (13%), SAIC (7%), Changan (7%), Tesla (5%), Chery (4%), Hima (4%), Leapmotor (4%), Li Auto (4%), Xpeng (3%), and Others (21%).
BYD’s market leadership is a product of relentless capacity expansion, vertical integration, and multi-brand strategies, enabling rapid response to market demands. Other Chinese players, such as Geely and Chery, have furthered diversification in models and powertrain options, reinforcing the domestic dominance.
This structure highlights the overwhelming power of homegrown OEMs in shaping consumer choice, product innovation, and regulatory alignment in the largest EV market on earth.
Tipping Points and Policy Drivers
China’s NEV transition is guided by a mix of targeted policies, industry incentives, and strong regulatory alignment promoting electrification. The September 2025 government plan is just the latest in a series of consequential policies incentivizing NEV sales, infrastructure rollout, and R&D investment.
A notable milestone was reached in August 2025: NEVs accounted for over 55% of all new car sales, a penetration rate seen as a critical tipping point. From this stage, network effects, brand equity, and supply chain efficiencies generally ensure that adoption accelerates and consolidation among lagging performers ensues.
The intent is clear, China’s central government has established NEVs as both a critical pillar of industrial modernization and a cornerstone of national sustainability strategy. Coordinated action across ministries ensures robust support for charging infrastructure, battery supply chains, and domestic innovation capacity.
The Future of Automotive Innovation
The transformation underway in China is not limited to market share or regulatory benchmarks, it is a narrative about the future of innovation itself. With advanced integration of smart technologies, digitized mobility, and rapid advances in autonomous driving, Chinese OEMs are reimagining the auto industry entirely.
As the Tesla example illustrates, technology-driven disruption can carve out significant market positions even for foreign enterprises, but the center of gravity has shifted unmistakably. Scale, speed, and local technological mastery are defining the contours of tomorrow’s automotive landscape.
Reflected in the words of Claes Orn, CEO of Thematica: "The future of automotive innovation is no longer written in Detroit, Stuttgart, or Tokyo, it’s being written in China, where scale, speed, and technology are reshaping the global industry."
Conclusion: China’s Influence Goes Global
China’s NEV journey, underpinned by powerful domestic OEMs, huge government backing, and a culture of relentless innovation, is more than a local phenomenon. The ripple effects are global: supply chain reconfigurations, technological partnerships, and policy benchmarking now emanate from Beijing, Shanghai, and Shenzhen, not Detroit or Munich.
As NEVs move further into the mainstream and the market tips decisively toward full electrification, stakeholders worldwide, investors, suppliers, automakers, and policymakers, must reckon with the realities and opportunities of a China-centric mobility future.
In essence, China’s NEV market has become a testbed and blueprint for the next era in automotive history, one defined by speed, scale, and technological progress that are currently unmatched anywhere else on the planet.
