‘Key pillar’: the 5-year powerhouse plan for China’s car industry

China aims to become a global automotive powerhouse by 2030 by increasing domestic sales and promoting technological advancements, as outlined in the country's 15th five-year plan for the intelligent connected new-energy-vehicle industry. The new-energy category includes electric vehicles and plug-in hybrids. China will strengthen its industrial supply-chain strengths and prepare for the mass production of vehicles with automated driving features.

The plan declares, "[By 2030] the automotive sector will solidify its standing as a key pillar of the national economy."

Cui Dongshu, secretary general of the China Passenger Car Association (CPCA), stated that the plan's timing is "well judged" as the auto industry undergoes structural transformation and total domestic sales decline as gasoline-powered passenger vehicles are replaced by electric cars. August's data showed that electric passenger vehicles sales fell by 10.1 per cent year on year, with total sales down 12.1 per cent for the January-August period.

The five-year blueprint sets specific milestones to achieve its goals. By 2030, new-energy passenger and commercial vehicle sales should make up 70 per cent and 40 per cent of new vehicle sales in their respective segments in the domestic market. These ratios were 58.6 per cent and 33.9 per cent for the first eight months of 2026, according to the China Association of Automobile Manufacturers (CAAM).

To achieve its targets, the plan includes concrete milestones such as raising overall labour productivity by 15 per cent by 2030 compared with 2025, facilitated by the wider deployment of digital and smart production lines. China's rapidly growing automobile sector has raised concerns in Europe and elsewhere, leading to accusations of industrial overcapacity and the "China Shock 2.0" theory. However, this five-year plan will exacerbate pressure on established automotive giants like Japan and Germany.