China will “strictly control” the licensing of new independent electric-vehicle manufacturers, push mergers across provincial lines and force “outdated and inefficient” capacity out of the market.
The changes were announced under a five-year plan for the industry published on Friday, the first to write the government’s campaign against price competition into national policy.
The 15th Five-Year Plan for the Intelligent Connected New Energy Vehicle Industry, dated September 9 and issued by the Ministry of Industry and Information Technology with eight other ministries and regulators, sets a target for NEVs to take 70% of domestic passenger-car sales and 40% of commercial-vehicle sales by 2030, and for “several” Chinese carmakers to rank among the world’s ten largest by sales.
The passenger target sits below where the market already is. NEVs took 54% of domestic retail passenger sales in 2025 and a record 65.2% in August, according to the China Passenger Car Association.
Fewer Entrants, Fewer Survivors
The capacity section of the plan is its sharpest. It commits the ministries to enforce the automotive investment regulations “strictly,” to “strictly control conditions for new independent NEV enterprise projects,” to “increase efforts on lawful mergers, acquisitions and cross-regional integration,” and to use “market-based, rule-of-law approaches to promote the orderly exit of outdated and inefficient capacity.”
Battery production capacity is added to the early-warning system for the first time.
A separate section on market order targets the local-government subsidies, tax breaks and land deals that built provincial EV hubs over the past decade, calling them “improper” and pledging to “regulate industry data disclosure and enterprise account payments,” a reference to the supplier payment terms Beijing has pressed carmakers on this year.
It also promises stronger antitrust, unfair-competition and price enforcement and a market of “quality-price matching.”
The language follows Vice Minister Xin Guobin’s warning at a State Council briefing on August 26 that “irrational competition remains a stark issue.” Xin said NEV sales had risen from 1.37 million to 16.49 million over the previous plan period, taking 47.9% of all vehicle sales including exports and commercial vehicles.
The consolidation target is explicit at the top of the market too. The plan calls for “several” vehicle manufacturers in the global top ten by sales and component suppliers in the global top 100. BYD is the only Chinese carmaker in the top ten today. Geely, Chery and SAIC sit just outside on group volumes.
Autonomy as Policy
The plan expects “highly automated driving” on expressways, urban expressways and some city roads by 2030, and states that the safety performance of vehicles with autonomous driving systems “will greatly exceed that of human drivers.”
It commits the ministries to “orderly advance access and road-use approval” for such vehicles and to “support large-scale application.”
The enforcement mechanism is a three-tier safety monitoring platform, national, local and enterprise, that will unify reporting of safety events and feed risk assessments for both product approvals and road-traffic management. Access requirements for driver-assistance and autonomous systems, and for power batteries, are to be raised.
China granted its first production-access permits for Level 3 conditional autonomy to Changan and BAIC’s Arcfox in December, for designated roads in Chongqing and Beijing, after a pilot programme that began with nine automaker consortiums in June 2024. Guo Shougang, head of the ministry’s equipment industry department, said on July 27 that more than 20,000 test licences had been issued, 57,000 km of roads opened and 220 million km of test mileage accumulated.
Guo’s remark that day that the plan’s drafting would be accelerated sent Hong Kong-listed carmakers higher on July 29, with Li Auto closing up 10.2% at HK$54.75, XPeng up 4.0% and Nio up 3.6%.
The Other Targets
Alongside the 70% and 40% shares, the plan sets average fleet fuel consumption for passenger cars at about 3.3 litres per 100 km and average consumption for battery-electric passenger cars at about 11.5 kWh per 100 km by 2030, a 15% rise in labour productivity from 2025, and an industry carbon peak “before 2030.”
Solid-state batteries, automotive AI, chips and steer-by-wire chassis are named as priority standards. A key national R&D programme for the sector is to be established.
Implementation promises the continuation of NEV purchase-tax preferences, trade-in subsidies, rural promotion and bus-fleet replacement, further reform of NEV insurance, and removal of restrictions on car purchase and use.
The plan also carries a chapter on overseas expansion, including export credit insurance, currency hedging products, China-Europe rail capacity and cross-brand overseas parts warehouses, which EV will report separately.
The previous plan, published in 2020, set a 20% NEV share for 2025. The 2025 outturn was more than double that.
