China Sets Its Automotive Course Through 2030
China has presented its development plan for intelligent and connected new energy vehicles (NEVs) for the years 2026 to 2030. The central goal is for 70% of all new passenger cars sold in the Chinese market to be NEVs by the end of the decade.
For commercial vehicles, the government is targeting an NEV share of 40%. The Chinese term NEV covers battery-electric cars, plug-in hybrids, and fuel-cell vehicles, so the target should not be equated with the share of purely electric vehicles.
| Area | 2030 target |
|---|---|
| New passenger cars | 70% NEV share |
| New commercial vehicles | 40% NEV share |
| Energy consumption of battery-electric passenger cars | Average of around 11.5 kWh/100 km |
| Fuel consumption of new passenger cars | Average of around 3.3 L/100 km |
| Labor productivity | 15% higher than in 2025 |
The plan was jointly adopted by nine government bodies. In addition to the Ministry of Industry, they include the national development authority and the Ministry of Transport. This means the strategy extends well beyond conventional vehicle subsidies.
Autonomous Driving Becomes a Priority
By 2030, highly automated driving functions are to be deployed on a large scale on highways, urban expressways, and selected city streets. Trials involving passenger cars, buses, delivery vehicles, and heavy trucks are planned.
However, this does not mean that fully driverless cars will be operating everywhere in China in five years. Approval and access to public roads are to be introduced gradually, accompanied by new procedures for assessing technological maturity and safety.
China’s goal is not merely greater automation, but safety performance that is demonstrably better than that of human drivers.
The challenges this can pose away from clearly marked roads are illustrated by Xpeng VLA 2.0’s autonomous ferry maneuver. Such systems must understand traffic situations that cannot be handled solely through lane markings and predefined rules.
Vehicles, Roads, and the Cloud Converge
To enable the widespread use of automated vehicles, China plans to expand digital infrastructure in major cities and along selected long-distance routes. The focus is on connecting vehicles, road infrastructure, and cloud services.
This allows traffic signs, traffic lights, and road sensors to provide additional information to the car. The vehicle detects a hazard later, while the infrastructure reports it earlier → automated systems have more time to respond safely.
At the same time, artificial intelligence is to play a greater role in energy management, vehicle dynamics control, user interfaces, and predictive fault detection. Integration with smart homes and robots is also part of the long-term strategy.
More Charging Power and Greater Grid Integration
China is planning additional fast-charging points, better charging networks in rural areas, and an expansion of battery swapping. High-power sites are to be planned more strategically, while vehicle-to-grid technology is set to play a greater role in the electricity system.
This aligns with the extremely high charging capacities currently being prepared by Chinese manufacturers. BYD, for example, is working on a charging network delivering up to 1,500 kW. However, such peak outputs require correspondingly powerful grid connections, battery systems, and cooling.
For battery cells, the focus is not only on charging speed and cost. The plan calls for further progress in battery safety and low-temperature performance. At the same time, the high share of LFP batteries in the Chinese battery market shows how strongly the industry is already shifting toward robust and comparatively inexpensive cell chemistries.
China Seeks Tighter Control Over Excess Capacity
The government is combining its growth targets with stricter industrial oversight. New independent NEV manufacturers will only be approved under more stringent conditions. The creation of additional battery production capacity will also be monitored more closely.
Mergers, restructuring, and consolidation across provincial boundaries are explicitly encouraged. Unprofitable capacity is to be eliminated through market-based and legal procedures so that existing plants can achieve higher utilization rates.
At the same time, China is targeting intense price competition. Antitrust law, price supervision, and rules against unfair competition are to be enforced more consistently. Unauthorized local subsidies, tax breaks, or particularly favorable land deals intended to attract new factories are to be restricted.
Semiconductors and Operating Systems Remain Strategic
Despite the strong position of Chinese manufacturers, the plan still identifies technological gaps. These include automotive chips, operating systems, industrial software, and critical raw materials.
China also wants to establish several domestic automakers among the world’s ten largest manufacturers by sales. The development of global EV sales in 2026 shows that international competition is already gaining momentum.
What the Plan Means for Germany and Europe
The 70% target applies to China’s domestic market and is not a direct requirement for Europe. Nevertheless, it is relevant to manufacturers in the DACH region—Germany, Austria, and Switzerland—because China can continue to expand economies of scale in batteries, electronics, software, and production.
This will place European brands under greater cost and innovation pressure. At the same time, the strategy creates opportunities for cooperation, as foreign and Chinese companies are to be able to work together more closely on research, key components, and investment. The plan promises equal treatment for domestic and foreign companies in government procurement procedures.
Tax incentives for NEVs, trade-in programs for older vehicles, and the electrification of city buses remain important policy tools. The new five-year plan therefore focuses not only on higher sales figures, but also on transforming the entire ecosystem of vehicles, energy, infrastructure, and automated driving.
