Economic Daily: China needs to win three tough battles to become an automotive powerhouse

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 the recently released 15th Five-Year Plan for the Development of the Intelligent and Connected New Energy Vehicle Industry (hereinafter referred to as the "Plan") jointly issued by nine government departments, including the Ministry of Industry and Information Technology.

A Measured but Meaningful Ambition

Notably, the Plan uses the phrase "entering the ranks of the world's automotive powers" rather than "becoming an automotive power." This restrained wording carries significant implications. In terms of actual development, China's overall industrial chain ecosystem for intelligent electric vehicles is already globally leading, with the country's new energy vehicles and power batteries for passenger cars achieving widespread adoption.

Three Key Battles Ahead

The Plan outlines three critical areas of focus for the next phase of development:

1. The Battle for Core Technologies

In the first half of the new energy vehicle race, China focused on electrification, leveraging market scale and policy support to lead globally. The second half will center on intelligence, where the competition hinges on underlying hard power. This requires breakthroughs in key foundational materials, operating systems, industrial software, and automotive chips.

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

Currently, the capacity utilization rate of China's domestic automotive industry stands at only about 70%, below the healthy threshold of 75%. Meanwhile, the profit margin for automotive manufacturing in the first half of this year was a mere 3.8%. "Revenue growth without profit growth" has become a common industry ailment, with price wars straining even leading companies. In response, capacity early warning and regulation mechanisms have been included in a national document for the first time. The Plan aims to curb new capacity by strictly controlling the establishment of new independent new energy vehicle projects.

3. The Battle for Global "Systematic Expansion"

In 2025, China exported 8.32 million vehicles to over 200 countries and regions. While these numbers are impressive, the Plan emphasizes that going global cannot remain at the level of product export. It calls for building brand awareness and participating in the development of international standards. To truly enter mainstream markets in Europe and the United States, China must rely on brand strength, standard-setting influence, and localized operational capabilities. The Plan proposes cultivating several vehicle manufacturers that rank among the global top ten in sales and several component suppliers among the global top 100. These are not merely quantitative targets but also qualitative requirements.

A New Starting Point, Not a Final Destination

Becoming an automotive power is not the end goal, but rather a new starting point for China's automotive industry to transition from a follower into a rule-setter. Looking ahead, China's automotive industry will continue to advance toward green, intelligent, high-end, and international development, continuously expanding its competitive advantages and providing solid support for the high-quality growth of China's economy.

(Source: Economic Daily)