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Emma Ma

China is set to secure its place among the global automotive powerhouses by 2030 through further efforts to boost domestic sales and foster technological innovation, while a capacity alert mechanism will be introduced to guard against disorderly competition.
The ambitious targets and actions are laid out in the country’s 15th five-year plan for the development of the intelligent connected new-energy-vehicle industry, unveiled on Thursday by the Ministry of Industry and Information Technology and eight other ministries. The new-energy category comprises both battery-powered electric vehicles and plug-in hybrid models.
According to the plan, China would further shore up its complete industrial supply-chain strengths in the sector and prepare for the large-scale roll-out of vehicles equipped with automated driving functions.
“[By 2030] the automotive sector will solidify its standing as a key pillar of the national economy,” the plan stated.
“The timing for rolling out this five-year plan is well judged,” said Cui Dongshu, secretary general of the China Passenger Car Association (CPCA). “The auto industry is undergoing structural transformation; total domestic sales are declining, as market leadership shifts from gasoline-powered passenger vehicles to electric cars.”
Data from the CPCA showed around 1 million electric passenger vehicles were sold domestically in August, down 10.1 per cent from a year earlier. Total sales in the January-August period fell 12.1 per cent year on year.
Cui said that exports currently served as the biggest pillar for China’s carmakers. But the new plan emphasised the domestic market, which was expected to fuel future growth.
To hit its targets, the five-year blueprint lays out concrete milestones. By 2030, new-energy passenger vehicles and new-energy commercial vehicles should make up 70 per cent and 40 per cent of new vehicle sales within their respective segments in the domestic market, it said.
Data from the China Association of Automobile Manufacturers (CAAM) showed that for the first eight months of 2026, the respective ratios stood at 58.6 per cent and 33.9 per cent.
The plan also sets a goal to lift overall labour productivity by 15 per cent by 2030 compared with 2025, backed by wider deployment of digital and smart production lines.


China’s rapidly growing automobile sector has sparked alarm in Europe and elsewhere over its potential to affect local industries. Critics have accused Beijing of industrial overcapacity, a sentiment that has intensified and evolved into the “China Shock 2.0” theory. Proponents of the concept have pointed to Beijing’s record-breaking trade surplus of nearly US$1.2 trillion in 2025, riding a surge of low-cost, hi-tech exports like electric vehicles.
Thus the blueprint will further intensify pressure on established automotive powerhouses such as Japan and Germany, according to analysts.
But fostering growth is only one element of the strategy, with curbing industry involution standing as another key objective. Unlike the plan for 2021 to 2025, this round incorporates the “capacity alert” mechanism.
“Strict criteria will apply to new stand-alone new-energy-vehicle projects,” the plan said. “Legally compliant mergers, acquisitions and cross-regional integration of auto manufacturers will be stepped up.”
Oversight and capacity alerts for battery manufacturing would also be strengthened, it added.
Data from the National Bureau of Statistics showed that the auto sector’s capacity utilisation stood at 70.8 per cent in the second quarter, a 0.5 percentage point rise from the first quarter. Seventy-five per cent or above is usually regarded as healthy.
The CPCA’s Cui said the capacity alert was “a key lever” in the development of the auto industry, shifting anti-involution efforts “from rhetoric to institutional practice”.
“The plan can prevent haphazard construction of new plants while lifting capacity utilisation rates,” Cui said. “The early warnings covering both the auto-making and battery sectors will help avert price wars and foster a more balanced, rational pace of investment.”
According to the CAAM, China’s auto industry posted total revenue of 5.19 trillion yuan (US$773.5 billion) in the first half of this year, 1.8 per cent higher than a year earlier. Yet total profit tumbled 19.5 per cent as price-cutting ate into profit margins.


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Beijing’s outline calls for boosting domestic market and innovation while controlling capacity to avoid involution effects


Beijing’s outline calls for boosting domestic market and innovation while controlling capacity to avoid involution effects.


‘Key pillar’: the 5-year powerhouse plan for China’s car industry

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Beijing’s outline calls for boosting domestic market and innovation while controlling capacity to avoid involution effects

Beijing’s outline calls for boosting domestic market and innovation while controlling capacity to avoid involution effects