On December 31, Financial News reported (journalist Liu Yang) that on December 30, Zhang Yongwei, vice chairman and secretary-general of the China Electric Vehicle 100 Forum, shared insights and thoughts about the development trends of China's New energy vehicle industry by 2025.

Trend 1: The auto incremental market has entered a phase dominated by electricity, with an expected 16.5 million sales of New energy vehicles by 2025.

The New energy vehicle industry has experienced 3-4 years of rapid growth, with penetration rates equal to traditional fuel vehicles. However, no industry develops at a breakneck pace; it may need to stabilize at a certain stage and gradually enter a mature phase. Zhang Yongwei analyzes that the overall vehicle market has entered a relatively stable development stage, which plays a key role in driving domestic demand and investment.

Based on this, Zhang Yongwei determines that the overall vehicle market will steadily progress next year, with an estimated sales volume of around 32 million vehicles by 2025, of which approximately 26 million in the domestic market, with a growth rate of 3%. In an optimistic scenario, the sales of New energy vehicles will be around 16.5 million (including exports) by 2025, with a growth rate close to 30% and a penetration rate exceeding 50%; domestic demand is expected to reach 15 million vehicles, with a penetration rate exceeding 55%, entering a relatively high-quality development stage.

Trend 2: Plug-in hybrids and range extenders combine advanced technologies of electric and RBOB Gasoline, becoming important forces in the increment of New energy.

Zhang Yongwei stated that by 2025, plug-in hybrids and range extenders will be rapidly developing sectors, with the market share of the two technology routes approaching 50%, and sales expected to exceed 8 million vehicles, with an increment of over 2.5 million vehicles.

Relying solely on electric vehicles makes it difficult to have a competitive advantage in plug-in hybrid technology, and traditional RBOB Gasoline technologies cannot effectively pursue the hybrid route either. In Zhang Yongwei's view, the plug-in hybrid and range extender routes leverage the advantages of hybrid technologies, making New energy technology more diversified, "Hybrid technologies not only address the challenges of the incremental market but also solve the new positioning problems of different technologies. This is a characteristic of the China market and also the best solution to resolve controversies."

Trend 3: The new energy Commercial Vehicle sector is entering a rapid growth phase, and the penetration rate of new energy heavy trucks is expected to exceed 20%.

"The electrification of Passenger Vehicles has entered a phase of normalization, while Commercial Vehicles are entering a rapid growth period." Zhang Yongwei analyzed that in certain areas, the total cost of ownership (TCO) for new energy Commercial Vehicles offers advantages over RBOB Gasoline, which will rapidly increase the penetration rate of new energy Commercial Vehicles.

The Electric Vehicle 100 Forum determines that by 2025, the domestic sales of new energy Commercial Vehicles will exceed 0.9 million units, approaching 1 million units, with a growth rate of 80%, showing explosive growth. At the same time, the development speed varies across different sectors; it is expected that the penetration rate of new energy heavy trucks will grow rapidly, with a conservative estimate of sales exceeding 0.11 million units next year, breaking the 20% penetration rate; the urban logistics distribution market will also show rapid development.

Trend 4: A key year for advancing the "new international development" of new energy vehicles.

Zhang Yongwei believes that Chinese automotive companies are facing a new international development environment, and the next step is to use advanced manufacturing and product services to serve the global market. The biggest challenge is the lack of successful experience, so the meaning of "new international development" is: internationalization and globalization are necessary, but the old path cannot be followed.

"In the past, (automotive export) was more about trade, even if investment (in factories) was made, it was hoped to operate independently. But in the future, it is necessary to form joint ventures, cooperate, and evolve into symbiotic enterprises, with more collaboration in capital structure and production, and to internationalize using a new model of interest coordination." Zhang Yongwei emphasized that when car companies go abroad, they cannot just replicate domestic strategies as before; they must also learn to understand the world, know the regulations and standards that are suitable for local development.

The Electric Vehicle 100 Forum expects that by 2025, China's new energy vehicle exports (including local production) will reach 1.4 million units, a year-on-year increase of 10%.

Trend 5: New generation battery products represented by Solid State Batteries are accelerating mass production, with a goal of completing small batch deployments on vehicles in the next 2-3 years.

Zhang Yongwei stated that currently the domestic research on Solid State Battery technology is leading, with the shipment volume of Solid State Battery technology content (including both on-board and off-board fields) expected to exceed 10GWh by 2025. The all-solid-state battery is currently in the core technology breakthrough and validation stage, and it is expected to complete small batch testing in the next 2-3 years.

"Automakers have already invested in Solid State Batteries, and traditional battery companies are even less likely to give up. New forces in the battery industry are also attempting to reshape the battery industry pattern through the new Solid State track." Zhang Yongwei mentioned that material and equipment companies already have sufficient strength and capital to enter the Solid State Battery field, and the industrialization cycle of all-solid-state technology is rapidly shortening.

Trend Six: Automotive companies explore new models for high-quality development; blind expansion is unsustainable.

"Once the automotive industry enters the stage of high-quality development, the model of pursuing multiple brands and blind expansion is difficult to sustain, and the development model of enterprises needs adjustment." In Zhang Yongwei's view, the development of the automotive "dual transformations" (electrification and intelligence) brings immense investment pressure on enterprises and poses new challenges to their development models. Investment must be selective, rather than relying on independent R&D. "As investment demands increase, companies need to shift from broad investment to further identifying their focus, forming core competitiveness; such adjustments may be strategic for business development."

Zhang Yongwei believes that one of the new development models for enterprises involves reducing investments and coming to market with a lighter load, optimizing existing resources. This manifests in that next year, perhaps more companies will be willing to do contract manufacturing, or not build factories, relying instead on the production capacity of other companies. The second new model is that as the automotive industry increasingly adopts Internet Plus-Related attributes, the profitability model will undergo transformation; it cannot rely on a single product to evaluate the profitability of a company or product, it must consider the entire lifecycle.

Trend Seven: Multinational automakers accelerate new localization development, moving from "two ends abroad" to "two ends outward".

Zhang Yongwei stated that multinational automotive companies are accelerating new localization development, facing new pressures and the landscape is also diversifying. "Many multinational companies are starting to establish global R&D centers in China to conduct research and empower the world. The technology direction has changed from previously being externally driven to utilizing China's advantages in new energy and intelligent technology to provide services for the global market." Zhang Yongwei believes this represents a significant change for multinational automotive companies and is a primary trend of localization development.

Additionally, another trend in the accelerated new localization development of multinational automotive companies is the outward direction of market supply chains. "Once China's supply chain combines with the globalization of multinational companies, it will certainly enhance their global competitiveness and explore a new pattern of the Chinese automotive industry serving the world. This mode of global symbiosis will benefit the entire Chinese Industry Chain," Zhang Yongwei said, emphasizing the need to closely monitor how multinational forces develop within China and how they leverage China's new situation in global services.

Trend Eight: The intelligence sector is entering a phase of full acceleration, with advanced intelligence entering the mainstream market range of 0.1 to 0.2 million yuan.

Unlike the longer process experienced with electrification, the intelligence sector quickly moves into a rapid development phase once established. The Electric Vehicle Hundred People's Conference determines that advanced intelligence technology is rapidly entering the mainstream market range of 0.1 million to -0.2 million. Intelligence is entering a new phase of full popularization, transitioning from past considerations of 'whether or not' to consumer pursuits of 'how good it is'—both fun and practical.

The Hundred People's Conference also determines that 2025 will be the 'first year' of basic intelligence, with smart driving and smart cabins tending to become standard features, moving towards a phase of comprehensive coverage. Major models in the coming years will have certain intelligence technologies or products onboard. The penetration rate of Level 2 or higher assisted driving in passenger vehicles will be about 55.7% in 2024 and may approach 65% in 2025. The penetration rate of smart cabins in passenger vehicles will be about 71% in 2024, reaching 76% in 2025.

Trend Nine: AI technology will bring a whole new transformation to the auto industry, with 2025 being a key year for the integration of AI into vehicles.

Zhang Yongwei stated that the application of Artificial Intelligence (AI) in the automotive field will bring about a significant transformation in the auto industry, with the next year being pivotal for AI integration into vehicles.

Currently, intelligence is based on traditional smart technologies, but the development of AI has changed the development model of (automotive) intelligence and has brought comprehensive transformation to the auto industry, presenting a tremendous opportunity for industrial growth. Zhang Yongwei believes that once automobiles encounter AI, they become more practical; as AI matures, vehicles become the largest application scenario for AI, thus 'Automobile + AI' becomes a win-win situation, achieving the best combination.

Furthermore, AI technology will be comprehensively applied throughout the entire process of automotive research, production, supply, sales, and service—not only in whole vehicles but also in components, such as smart headlights, smart seats, and more. In the service sector, the development of smart vehicles will fully transition into the era of large models.

Trend Ten: The auto industry is accelerating towards an aggregation-type industry's spillover effect, with flying cars and embodied intelligence worth attention.

After the automobile industry becomes more intelligent, its aggregation spillover effect will accelerate significantly, making the Smart Automobile industry easily transform into an aggregation-type intelligent industry. In Zhang Yongwei's view, if automotive technology is applied to low-altitude fields, flying cars would be the Smart Automobile that ‘flies up’; if applied to embodied intelligence fields, humanoid robots would be the Smart Automobile that ‘stands up’. In 2025, the development of Smart Automobiles will accelerate, and the emergence of 'flying up' and 'standing up' will create an aggregation-type industrial spillover, and new productive forces will also accelerate to amplify in the automobile industry, this will be evident by 2025.