New energy vehicles are an unavoidable trend in the future of the automotive industry, both domestically and internationally. This is now widely recognized as a consensus. The growth of new energy vehicles has always been closely tied to government support, especially through various subsidy policies. However, with the gradual withdrawal of electric vehicle subsidies, the competitive advantage of domestic brands is being challenged.
In recent years, foreign automakers have not made significant efforts in China's new energy market. One reason is that the industry is still in its early stages, with a relatively small market size. Additionally, the presence of purchase subsidies for electric vehicles has weakened their traditional edge over domestic brands in the fuel vehicle segment.
However, it's important to note that the shift toward new energy vehicles is not just a local trend—it's an international consensus. Countries like the U.S., EU, and Japan have all developed national strategies to support this transition. Established foreign brands have also been actively investing in electric vehicle technologies, including R&D in areas such as fuel cells, lithium batteries, inverters, rotors, electrodes, and more. Their technological foundations remain strong.
Take Toyota, for example. In addition to its leadership in hybrid technology, it is also at the forefront of fuel cell and lithium battery innovations. Its expertise spans subcomponents like diaphragms, electrolytes, and PCUs. By 2018, Toyota planned to fully roll out its modular platform for new energy vehicles, signaling a major step forward.
By the end of 2017, Toyota adjusted its strategy to better align with global trends. It announced plans to stop selling conventional internal combustion engines by 2025. Alongside hybrids and hydrogen fuel cell models, it also introduced plans for its first pure electric vehicle. Collaborating with companies like Panasonic, Mazda, and Denso, Toyota is pushing forward with battery and electric vehicle research, with plans to launch its first electric car in China by 2020—this signals a serious move into the Chinese market.
Volkswagen, too, has committed to investing 20 billion euros in new energy vehicle R&D before 2030. The company is building a new electric vehicle platform called MEB in China, with FAW Volkswagen and Shanghai Volkswagen sharing the new energy model portfolio.
The double-points policy is pushing foreign automakers to introduce more new energy vehicles in China. As foreign brands update their strategies, we can expect a surge in product launches around 2020, with fierce competition expected by 2025.
While many foreign brands are still cautious about the pace of electrification, some like Mercedes-Benz and BMW have set ambitious targets, aiming for 15–25% of their sales to come from new energy vehicles by 2025. This shows a more aggressive approach compared to others.
Of course, the global new energy vehicle market is still in its early phase, and its future remains uncertain. A gradual and practical approach may help brands navigate both fuel and electric routes effectively.
From this, we can see two key points: First, most foreign brands will have between 10 to 40 new energy models available in China by 2020. Second, by 2025, hybrid vehicles—including plug-in hybrids—will be a major focus. Toyota, Honda, and Ford are particularly optimistic about the competitiveness of hybrid technology, which highlights a potential weakness for domestic brands.
Between 2009 and 2017, China provided nearly 200 billion yuan in subsidies for new energy vehicles. An additional 200 billion is expected over the next three years, offering significant support to domestic electric vehicle manufacturers. 2020 marks the complete withdrawal of these subsidies, but it’s also a critical moment when foreign automakers will likely launch a strong comeback in the Chinese market. Are domestic brands ready? There are still three years to prepare.
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