Competition producing steady stream of new NEV models

BEIJING — Nearly two of every three passenger cars sold at the retail level in China are now new energy vehicles, a share that signals both the vitality of China's NEV market and the industry's capacity to turn new technologies into reliable products at scale.

Industry data show that NEVs accounted for 65.1 percent of passenger-car retail sales in July, up 11.6 percentage points from a year earlier and marking the fourth consecutive month above 60 percent.

For August, passenger-car retail sales are estimated to have reached 1.58 million units, including about 1.04 million NEVs, which would put the penetration rate at 65.8 percent, 10.6 percentage points higher than a year earlier.

Lower costs, better quality

Lower costs, technology upgrades and changing consumer preferences have helped lift NEVs' share of passenger-car sales, industry insiders said.

As battery material prices have normalized and new processes such as integrated die-casting and battery-chassis integration have been adopted at scale, manufacturing costs have continued to fall, allowing some NEVs to match or undercut comparable gasoline-powered vehicles, said Jiang Tianci, head of an automobile dealers association in Anhui province.

At an NEV dealership in Chongqing, where sales rose more than 10 percent month-on-month to exceed 220 units in May, the manager said buyers were shifting their attention from power specifications to intelligent features.

In Haizhu district, Guangzhou, Guangdong province, a customer visiting an NEV showroom tried voice controls, a large in-car display and driver-assistance features, and was wowed by the experience.

Charging access has also improved, with the number of electric vehicle charging points reaching 23.68 million by the end of July, up 41.9 percent year-on-year, said the National Energy Administration.

Higher gasoline prices have further strengthened the operating-cost advantages of NEVs, with retail gasoline prices still up a net 1,345 yuan ($200) per metric ton from the start of the year, even after a mid-August reduction, according to calculations based on data from the National Development and Reform Commission.

A Chongqing resident surnamed Wang recently replaced his gasoline-powered car with an EV, saying that the switch had cut his monthly commuting costs from more than 1,200 yuan for gasoline to less than 200 yuan for electricity, saving him around 12,000 yuan a year.

From scale to iteration

The growing presence of NEVs in China's passenger-car market is supported by an industrial ecosystem capable of moving new technologies quickly from development to production.

China's automotive and EV sectors have expanded on an unprecedented scale and at an unprecedented pace over the past decade, Shalini Palmer, corporate vice-president of automotive business at Analog Devices, said at the Global New Energy Vehicle Cooperation and Development Forum in Shanghai last week.

China now has one of the world's most dynamic and robust automotive ecosystems, a result Palmer attributed to sustained investment, rigorous engineering discipline and a pace of execution that exceeds industry expectations.

China's automotive competitiveness is rooted in a virtuous cycle between technological progress and industrial development, said Jiang Yaoping, former vice-minister of commerce, at the forum.

The industrial scale underpinning that cycle is visible in the Yangtze River Delta, which accounts for approximately 40 percent of China's NEV output and has formed a "four-hour industrial circle" in which all the components needed for an NEV can be sourced within a four-hour drive.

Jiang said the country's complete industrial system and vast market provide a testing ground for new technologies, with frequent user feedback and diverse use cases allowing such technologies to be refined quickly through large-scale application.

The pace of iteration is evident in product development, with Chinese automakers shortening development cycles from three to five years to around 18 months in recent years, said Zhang Lin, chief representative and general manager of the German Association of the Automotive Industry China.

Battery development shows the same pattern, with CATL launching its first Shenxing superfast-charging battery in 2023, a second-generation version in 2025 and a third-generation version this April.

The company said the latest version can charge from 10 percent to 80 percent in three minutes and 44 seconds and retain more than 90 percent of its capacity after 1,000 full charging cycles.