NEV policy framework

China’s Automotive Industry Technology Roadmap 3.0, published by the China Society of Automotive Engineers (China‑SAE) under the guidance of the Ministry of Industry and Information Technology (MIIT) of China in October 2025, outlines a strategic pathway for achieving deep electrification, carbon reduction, and intelligent mobility by 2040. The roadmap envisions a steady transition from internal combustion engines to hybrid and NEVs, with NEVs expected to account for around 70% of new light-duty vehicle sales by 2030 and over 85% by 2040. Fuel efficiency targets for remaining combustion vehicles will tighten to 3.5 L/100 km by 2040, supporting national carbon neutrality goals.

At the same time, China aims to lead in intelligent and connected vehicle (ICV) technologies, achieving near 100% L2+ automation by 2030 and widespread L3–L4 autonomous driving adoption by 2040. Together, these initiatives will position China as a global leader in sustainable, smart, and high-efficiency automotive innovation.

China’s Dual Credit Policy (双积分政策) integrates fuel efficiency and new NEV production targets to drive the automotive industry’s green transition. Under the 2026–27 NEV requirements, automakers must sell a significantly higher proportion of NEVs, especially long-range BEVs, to meet regulatory standards. The policy aims to promote cleaner and more efficient technologies and encourage market-based competition in the NEV sector instead of relying on direct subsidies.