Economic Daily: China writes 'entering ranks of auto power' into industry plan for first time, stresses three tough battles ahead

China has, for the first time, included the goal of "entering the ranks of the world's automotive powers" in an industrial plan, according to a recent policy document jointly released by nine government departments, including the Ministry of Industry and Information Technology.

The "15th Five-Year Plan for the Development of the Intelligent and Connected New Energy Vehicle Industry" (hereinafter referred to as the "Plan") outlines the country's ambition to become a global leader in the sector by 2030.

Notably, the Plan uses the phrase "entering the ranks of the world's automotive powers" rather than "becoming a fully established automotive power." This restrained yet meaningful wording reflects a realistic assessment of the industry's current standing.

Key Highlights of the Plan

1. A Battle for Breakthroughs in Core Technologies

In the first half of the new energy vehicle (NEV) revolution, China focused on electrification, leveraging market scale and policy support to lead globally. The second half, however, centers on intelligentization, which demands deeper technological capabilities. The Plan emphasizes the need for breakthroughs in:

• Key foundational materials
• Operating systems
• Industrial software
• Automotive chips

2. A Battle Against "Involution" to Regulate Industry Order

The domestic automotive industry currently faces significant structural challenges:

• Capacity utilization rate: Only about 70%, below the healthy threshold of 75%
• Profitability: In the first half of this year, the profit margin of the automotive manufacturing sector was just 3.8%, with "revenue growth without profit growth" becoming a common industry ailment. Price wars have even strained leading companies.

For the first time, a national document includes capacity early warning and regulation mechanisms. The Plan aims to:

• Curb new capacity: Strictly control the approval of new, independent NEV projects
• Promote consolidation: Encourage mergers and restructuring to improve efficiency

3. A Battle for Global Expansion Through "Systematic Overseas Presence"

In 2025, China exported 8.32 million vehicles to over 200 countries and regions. While these numbers are impressive, the Plan stresses that overseas expansion must go beyond product export. Key priorities include:

• Building strong brand awareness
• Participating in the development of international standards
• Enhancing local operational capabilities, particularly to enter mainstream markets in Europe and the U.S.

The Plan sets a clear target: cultivate several vehicle manufacturers that rank among the global top 10 in sales, and several parts suppliers among the global top 100. This is not just a quantitative goal but a qualitative requirement.

A New Starting Point, Not a Final Destination

Becoming an automotive power is not the end goal. Rather, it marks a new beginning for China's automotive industry—a transition from a follower to a rule-setter on the global stage. Looking ahead, the industry will continue to advance toward greener, smarter, higher-end, and more internationalized development, strengthening its competitive edge and providing solid support for the high-quality growth of China's economy.

Source: Economic Daily