A look back at a transformative year in China's auto industry

New energy vehicles exceed 50 percent of market share

Since March, the market share of new energy vehicles has exceeded 50 percent in China's domestic retail passenger vehicle market, according to data from the China Passenger Car Association. In November, the rate increased to 59.3 percent, up 7 percentage points from the same period in 2024. Preliminary estimates indicate that NEV retail sales in December could reach approximately 1.38 million units, potentially pushing the monthly penetration rate above 60 percent for the first time. December marked the end of the long-standing purchase tax exemption policy for NEVs. From Jan 1, the policy of exempting NEVs from purchase tax has been adjusted to a policy of collecting the tax at half the usual rate, reflecting the market's evolution from policy-driven growth to a more mature, market-led phase.

Tighter safety rules aim to tackle fires

China is set to enforce the world's first mandatory safety regulations for new energy vehicle batteries that explicitly prohibit fires and explosions, a landmark move to address public concerns and solidify its position as a global NEV pioneer. Issued by the Ministry of Industry and Information Technology in April 2025, and effective from July 1, 2026, the updated standards will replace a 2020 version, which only required a five-minute warning period in the event of fire risk, shifting the focus to proactive risk elimination. The core provision of the regulations stipulates that batteries must not ignite or explode for at least two hours, in the case of thermal runaway — a self-heating state of lithium-ion cells that is the primary cause of battery-related problems. Cars must also emit a thermal event alarm while ensuring any smoke produced does not harm occupants.

Three-year action plan to boost charging network

China revealed a three-year action plan on Sept 24 to improve its electric vehicle charging infrastructure, as part of its broader efforts to boost consumer confidence and accelerate EV adoption nationwide. The plan sets out measures to expand charging network coverage, enhance operational efficiency and service quality, while fostering industry innovation. According to the plan, by the end of 2027, China aims to establish a nationwide network of 28 million charging facilities, with public charging capacity surpassing 300 million kilowatts — sufficient to meet the demand of more than 80 million EVs. Key measures include upgrading urban fast-charging networks, expediting charging facility upgrades in expressway service areas and tackling rural charging infrastructure shortages. The plan also emphasizes the improvement of charging infrastructure in residential areas and scaling up private charging facilities.

Impressive results from semi-solid-state battery

SAIC Motor's MG brand launched a new variant of the MG4 with a semi-solid-state battery at the Guangzhou auto show on Nov 21, which is the world's first and industry's only mass-produced vehicle equipped with a semisolid-state battery. Co-developed by SAIC Motor and Qingtao Energy, the battery uses a semi-solid electrolyte material, fundamentally eliminating the risk of spontaneous combustion associated with traditional lithium batteries. The China Automotive Technology and Research Center conducted tests on the system, which exceeded national standards, with testing intensity increased by more than 20 percent. At a subsidized price of 99,800 yuan ($14,280), the electric sedan can run 530 kilometers on one charge and can charge from 30 percent to 80 percent in 21 minutes.

New Volkswagen workshop promises fast development

Volkswagen Group China Technology Company put its new test workshops into operation in Hefei, Anhui province, on Nov 25. This makes China the first country outside Germany where Volkswagen Group can develop a new vehicle platform, from early development to validation, compliance approval and production readiness. The new workshops cover around 100,000 square meters and include more than 100 laboratories. They support software-hardware integration, battery and power train testing, and full-vehicle validation. Volkswagen Group said the added capacity will cut overall vehicle development time by 30 percent and accelerate rollout of the China Electronic Architecture. It will also support faster delivery of smart cockpit functions, advanced driver assistance systems and over-the-air upgrades for China-focused models.

Huawei mobility alliance delivers 1 million models

The Harmony Intelligent Mobility Alliance, which consists of five car marques Huawei has built with Chinese carmakers, announced on Dec 5 that its cumulative deliveries reached 1 million vehicles in just 43 months, with an average transaction price of 390,000 yuan ($55,790). The alliance, comprising Aito, Luxeed, Stelato, Maextro and Shangjie brands, jointly established by Huawei and Seres, Chery, BAIC, JAC and SAIC respectively, aims to create the first cross-brand shared after-sales network, focused on unified standards and resource sharing to standardize the service process. In 2026, the alliance plans to launch at least 11 new models across its five brands and update 10 existing models. The alliance projects reaching its next 1 million delivery milestone in approximately 10 months.

Changan Automobile reaches new milestone

China Changan Automobile rolled off its 30-millionth Chinese-brand vehicle, an Avatr 12 sedan, from the production line on Dec 10. This makes it the fastest Chinese-brand automaker to reach the milestone as local manufacturers accelerate their shift toward electric and intelligent vehicles. It took the Chongqing-based carmaker 30 years to reach its first 10 million vehicles in 2014, seven years to reach 20 million, and about four and a half years to add the last 10 million. The company has set a 2030 target of annual sales of 5 million units, with new energy vehicles accounting for more than 60 percent and overseas markets at more than 30 percent. It plans to expand its international capabilities in research, production and services, while extending its roadmap to include advanced batteries, power semiconductors, digital energy and recycling.

Autonomous cars being tested on public roads

The Ministry of Industry and Information Technology granted conditional approval for China's first Level 3 autonomous vehicles for public-road pilots on Dec 15, signaling a move from technology validation toward mass-production application under regulation. The approvals apply to two electric sedans — the Deepal SL03 and Arcfox Alpha S — allowing them to operate under defined conditions on designated highway sections in Chongqing and Beijing respectively. Following the approval, Chongqing issued the country's first L3 license plate on Dec 20, restricted to selected routes and a speed limit of 50 kilometers per hour. Beijing followed on Dec 23, issuing its first batch of L3 license plates and permitting speeds up to 80 km/h on designated expressway sections. The pilots are designed to clarify safety responsibilities and provide data for rules on liability, insurance and road management.

Mechanical door handles obligatory, says ministry

The Ministry of Industry and Information Technology released a proposed mandatory national standard on the safety performance of car door handles on Dec 16, requiring each door except the tailgate to have an exterior handle with a mechanical release function and adequate hand-operable space. The proposal aims to address safety concerns over hidden handles used on many new energy vehicles in China, which is scheduled to be implemented from Jan 1, 2027. It is stipulated in the proposal that car doors should provide at least 60 millimeters by 20 mm by 25 mm of hand-operable space. It also requires every passenger door, excluding the tailgate, to be equipped with an exterior handle capable of opening the door without tools even if the locking system remains engaged or the vehicle's battery catches fire.

Retail and production predicted to hit new heights

Statistics from the China Association of Automobile Manufacturers show that from January to November 2025, the cumulative production and sales of automobiles in China reached 31.23 million and 31.13 million units, respectively. These marked year-on-year increases of 11.9 percent and 11.4 percent. Both production and sales have reached new highs. Among these, over 11.2 million vehicles benefited from the national trade-in program with subsidies. Automobile exports reached 6.34 million units in the first 11 months of 2025, a year-on-year growth of 18.7 percent. The China Passenger Car Association estimates that the cumulative retail sales of the passenger car market will reach approximately 23.78 million units for 2025, a year-on-year growth of about 4 percent.