I. Market Continues to Grow Rapidly, Penetration Rate Approaching Historical Turning Point

The latest data from the National Bureau of Statistics shows that in May 2025, the production of new energy vehicles reached 1.245 million units, a year-on-year increase of 31.7%, significantly higher than the overall growth rate of the industrial sector. The cumulative production from January to May increased by 40.8% year-on-year, and the market penetration rate rose to 48.7%, indicating that new energy vehicles are about to occupy half of the automotive market. Policy dividends continue to be released on the consumption side: subsidies for trading in old vehicles and the new energy vehicle rural promotion activities stimulate demand, coupled with a year-on-year increase of 1.2 times in exports (212,000 units in a single month), jointly supporting the high prosperity of the industry.

II. Policy Dynamics: Rural Promotion Deepens and Subsidies Phase Out Simultaneously

1. 124 Models Promoted in Rural Areas, Independent Exhibition Area for Charging Piles Set Up

On June 15, five departments including the Ministry of Industry and Information Technology launched the 2025 New Energy Vehicle Rural Promotion Campaign in Rugao, Jiangsu Province. The number of selected models reached 124, a new high in the past six years, covering the price range from 20,000 to 400,000 yuan. For the first time, charging piles were set up as an independent exhibition area, promoting the "vehicle-charging integration" scenario and initiating the "Hundred Counties, Thousand Stations, Ten Thousand Piles" pilot project to address the pain point of rural charging coverage being less than 5%.

2. Nearly 10 Provinces Suspend Trade-in Subsidies

Cities such as Zhengzhou, Luoyang, Shenyang, and Xinjiang have successively announced the suspension of subsidy applications for vehicle replacement. The policy withdrawal speed exceeded expectations, which may force enterprises to strengthen their internal competitiveness.

III. Products and Technologies: High-Voltage Fast Charging and Intelligent Driving Proliferation Become Main Trends

1. 800V Platforms and Super-Charging Technologies Scale Up

Xpeng G7: The first to introduce a pure vision intelligent driving solution in the 250,000 yuan market segment, with a 200-kilometer range after 10 minutes of charging;

Audi Q6L e-tron: Equipped with Huawei's Kun Intelligent Driving System, offering a 765-kilometer range and 270kW super-charging. Industry trends show that the penetration rate of 800V high-voltage fast charging technology has increased by 50% compared to 2024, with "a cup of coffee's charging time for a 200-kilometer range" becoming the new benchmark.

2. Plug-in Hybrid Models Solve Range Anxiety

Models such as Chery Fengyun A9L have achieved a combined range of over 1,500 kilometers, with a fuel consumption of 1.4 liters per 100 kilometers when the battery is depleted. The share of plug-in hybrid models in county and rural markets has jumped from 9.5% in 2020 to 34.8%, becoming the main force in the下沉 market.

3. Battery Safety Standards Upgraded

BYD's Blade Battery has passed all safety tests of GB 38031-2025 ahead of schedule， including new rigorous tests such as safety after fast charging cycles and bottom impact， paving the way for the implementation of the new national standard in 2026.

IV. Quality Enhancement： Industry-Wide Reliability Improvement Project Launched

On June 5，the China Association of Automobile Manufacturers led the launch of the "New Energy Vehicle Quality and Reliability Improvement Project"， with the participation of the Ministry of Industry and Information Technology， the State Administration for Market Regulation， and over 100 enterprises along the industrial chain. The meeting pointed out that the reliability indicators of key components still lag behind international advanced levels. A full-chain quality innovation system from core components to the entire vehicle will be established， with a focus on addressing issues such as the stability of intelligent systems and the consistency of battery life. This move is seen as a key measure to cope with the EU carbon footprint certification (to be implemented in 2027) and enhance global competitiveness.

V. Globalization Accelerates： European Market Dynamics Change

Chinese brands are showing a "substitution effect" in the European market：

BYD： In April， sales in Germany and Italy surpassed Tesla， with a market share of 11.5% in Italy.

Xpeng Motors： Exported 7，615 units in the first quarter， a year-on-year increase of 370%， with plans for overseas sales to account for 50% in the future.

Industry analysis suggests that the advantages of the domestic supply chain and the differentiated positioning of intelligence are driving Chinese automakers to reshape the global competition logic.

VI. Challenges and Concerns： Price War and Infrastructure Shortcomings Unordered price wars receive regulatory warnings: The China Association of Automobile Manufacturers (CAAM) and the Ministry of Industry and Information Technology jointly issued a statement, criticizing the "inward-rolling price cuts" that squeeze corporate profits and threaten the safety of the industrial chain, and demanding that enterprises strictly adhere to the cost bottom line.

Bottlenecks in rural charging infrastructure remain to be addressed: The coverage rate of charging piles in county areas is less than 5%. High insurance premiums and a scarcity of maintenance outlets have led to an increase in the rate of buyers regretting their purchase of pure electric vehicles.

Future outlook

As the second half of the year sees a concentrated launch of 800V platform models, the implementation of quality improvement projects, and the deepening of rural promotion policies, the industry will enter a dual-driven stage of "technology popularization and quality upgrading". In the field of power batteries, breakthroughs in the mass production process of all-solid-state batteries and the commercialization of sodium-ion batteries (with an energy density of 160Wh/kg) are expected to further consolidate China's supply chain advantages. Zhongyuan Securities predicts that the annual sales of new energy vehicles will exceed 16 million units in 2025, representing a year-on-year growth of 14.4%.