China is actively steering its vast automotive sector toward a future dominated by Intelligent Connected Vehicles (ICVs), aiming to leverage the technology to unlock 1 trillion yuan (approximately $141.3 billion) in consumer spending by 2027. This ambitious drive, announced in a new national plan designed to bolster domestic demand, identifies ICVs as one of three priority sectors slated for rapid expansion and trillion-yuan scale growth.
The core of Beijing’s strategy represents a significant pivot: manufacturers are urged to move beyond sheer production volume and focus on precision alignment between supply and evolving consumer demand. This sophisticated approach mandates a transition from merely producing more vehicles to producing superior ones that cater to diverse and rapidly changing market preferences.
Shifting from Volume to Value
Under the new roadmap, authorities plan to foster this adaptation by cultivating approximately 100 signature products and innovative enterprises, launching technological pilot scenarios, and significantly expanding New Energy Vehicle (NEV) sales into rural markets. Vice Minister of Industry and Information Technology Xie Yuansheng described this transformation as a necessary move from quantity to quality, ensuring a high-grade supply meets sophisticated consumer needs.
This policy push arrives at a historic moment for China’s auto market. As of October 2025, NEVs accounted for 51.6% of all new car sales, marking the first time electric and hybrid vehicles outsold traditional internal combustion engine cars. This milestone reflects an extraordinary production surge, escalating from about 1.4 million units in 2020 to over 13 million in 2024.
As the market matures, consumer demands have become markedly specialized. Families are increasingly seeking spacious, multi-purpose vehicles, while younger demographics view cars as mobile living spaces, prioritizing features like voice interaction and smart cockpits. Simultaneously, a booming outdoor lifestyle segment is driving sales of electric off-road vehicles, some boasting combined ranges of 1,000 kilometers and advanced climbing capabilities.
Innovation Drives Market Maturity
This market diversification is underpinned by a robust supply chain and improving economics. Official data indicates that more than 60% of new passenger vehicles sold now incorporate Level 2 driver assistance systems. Furthermore, battery cell costs have decreased by 30%, and charging speeds have more than tripled in recent years, making ownership increasingly attractive.
Domestic automakers are already executing this precision strategy. Leapmotor, for instance, is targeting the personalized youth market with its affordable Lafa5 compact electric coupe. Zeekr is integrating advanced artificial intelligence algorithms and numerous sensors into its 9X model to prioritize safety, while Nio continues to expand its energy services ecosystem, which includes over 8,400 battery-swap and charging stations globally.
To fully maximize the sector’s potential, the strategy extends beyond new sales. The Ministry of Commerce has committed to expanding the used car market and crucial aftermarket services, including rentals and support for RV camping.
Fu Bingfeng, executive vice president and secretary-general of the China Association of Automobile Manufacturers, emphasized the long-term view. “The path forward relies on deepening the industrial application of intelligent connected technologies,” he stated. “Using innovative supply to unlock broader market potential is key to this economic growth.”
By focusing on high-quality, high-tech ICVs and adapting supply to nuanced demand, China aims to solidify its position as the global leader in automotive technology, simultaneously generating substantial domestic economic stimulus through focused innovation.