China declared a two-year initiative on Saturday aimed at ‘stabilizing’ its automotive industry, which has been grappling with intense price wars and export challenges.
According to state news agency Xinhua, the plan for 2025 and 2026, jointly issued by eight government departments, emphasizes conducting cost assessments and monitoring prices, while also promoting innovation and boosting domestic demand within the country.
The strategy anticipates a deceleration in overall vehicle sales, projecting approximately 32.3 million units for this year, which represents a 3% of the growth. This marks a dip from the 4.5% growth recorded in 2024, as noted by the China Association of Automobile Manufacturers.
In recent years, Beijing has poured substantial resources into advancing China’s electric vehicle industry, aiming to establish the nation as a dominant force globally.
Under the newly unveiled strategy, China has set a bold goal of selling 15.5 million new energy vehicles in 2025, signaling a projected 20% increase compared to the previous year.
However, intense price competition has driven many startups out of business, as companies saturate the domestic market with low-priced vehicles and aggressive trade-in offers. In a meeting held in July, Chinese authorities urged an end to this ‘irrational competition,’ advocating for more sustainable and balanced industry growth.
China’s push to boost vehicle exports is also facing growing pushback. In 2023, the European Union launched an investigation into potential unfair competition in the industry. More recently, Mexico announced it would raise tariffs on Chinese car imports to 50%, up from the current 15–20%—a move that drew a strong protest from Beijing.
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