On September 12, China's Ministry of Industry and Information Technology, along with seven other ministries, released the “Automotive Industry Growth Stabilization Work Plan (2025–2026)”. The plan sets ambitious targets: 32.3 million vehicles sold in 2025 (+3% YoY), including 15.5 million New Energy Vehicles (+20% YoY). Manufacturing output is expected to grow by 6%, outpacing sales.
The Work Plan outlines measures across four key areas: expanding domestic consumption through EV tax incentives, used car trade-in programs, and faster deployment of Intelligent Connected Vehicles (ICVs); improving supply quality via breakthroughs in auto chips, AI, solid-state batteries, and upgraded standards; optimising the development environment with better charging infrastructure and efforts to curb unhealthy price competition; and promoting exports through enhanced financial support and export credit optimization.
However, Sinolytics notes several headwinds. Local governments are cutting car purchase subsidies due to fiscal constraints. More than half of dealerships reported losses in H1 2025, driven by steep price competition and unmet sales targets. Export ambitions also face resistance abroad, with potential tariffs from countries such as Mexico and Brazil.
While the Work Plan promotes central-local cooperation and financial support, it lacks a clear strategy to boost domestic consumption in the absence of renewed subsidies.
