In 2025, China's new energy vehicle industry will usher in a major market reshuffle, and the 9.885 billion yuan subsidy fund issued by the Ministry of Finance in advance has undoubtedly injected a boost into the industry. With the implementation of this policy, it is expected that the new energy vehicle market will usher in more fierce competition, and the industry pattern will undergo profound changes. China Exportsemi will deeply analyze the impact of this subsidy policy on the industry from the aspects of policy background, technological development, industrial upgrading, market competition, etc., and discuss the competitive situation of the new energy vehicle market in the future.
1. Policy Background and Market Implications
The subsidy fund of 9.885 billion yuan issued by the Ministry of Finance in advance shows the country's firm support for the new energy vehicle industry. This decision is not only a direct subsidy for the industry, but also a measure to promote industrial upgrading under the guidance of policies. According to the data, Beijing received the most subsidy funds, reaching 1.21 billion yuan, of which more than 780 million yuan was used for the promotion and application of new energy vehicles. Shanghai, Jiangsu, Hebei, Henan and other regions followed closely behind, with subsidies of 925 million yuan, 800 million yuan, 710 million yuan and 620 million yuan respectively. Through these funds, the government hopes to further promote the popularization and marketization of new energy vehicles, especially with the positive response of consumers and enterprises, the market penetration rate of new energy vehicles continues to increase.
In addition, according to the statistics of the Department of Consumption Promotion of the Ministry of Commerce, the number of applications for car replacement renewal nationwide has exceeded 4 million. The average daily subsidy application volume remained at a high level, indicating that consumers have a strong demand for new energy vehicles. The early issuance of the subsidy policy not only provides financial support for enterprises, but also injects confidence into the market, further accelerating consumers' decision-making to buy cars.
Figure: The Ministry of Finance subsidized 9.885 billion yuan for new energy vehicles
2. Technological development and industrial upgrading
The rapid development of the new energy vehicle industry is inseparable from technological innovation and industrial upgrading. Driven by policies, new energy vehicle technology continues to progress, especially in battery technology, drive technology, intelligent network technology, etc. With the gradual decline of subsidy policies, the government is promoting the transformation of the industry to marketization, encouraging enterprises to innovate independently and enhance product competitiveness.
Cui Dongshu, Secretary-General of the Passenger Car Market Information Association, pointed out that the new energy automobile industry has experienced a process of gradual withdrawal of subsidies from the initial speculative participation, to the full entry of powerful enterprises in the later stage, and then to the gradual withdrawal of subsidies. The removal of the false and the true in the industry not only promotes technological innovation, but also accelerates the improvement of industry concentration. Some powerful enterprises in the industry have gradually established strong market competitiveness by increasing R&D investment and improving their technical level.
In addition, the industrial chain of new energy vehicles is gradually improving, from battery manufacturing, electric motor technology to vehicle production, every link is continuously upgraded. With the advancement of technology, the comprehensive performance of new energy vehicles has been continuously improved, especially in terms of battery life, charging efficiency and intelligent level, and consumer acceptance is also increasing.
3. Environmental impact and energy security
The promotion of new energy vehicles has not only played a positive role in improving air quality, but also has a profound impact on the country's energy security. According to research data, the popularity of new energy vehicles can help reduce greenhouse gas emissions and improve urban air quality. As China vigorously promotes the realization of carbon peak and carbon neutrality goals, new energy vehicles have become an important tool to reduce emissions.
More importantly, the development of new energy vehicles will help reduce dependence on oil. China relies on imports for about 60% of its oil, and the spread of new energy vehicles has helped reduce its dependence on external energy supplies. With the increasingly severe global energy security situation, new energy vehicles are not only a demand for environmental protection, but also a strategic measure to improve national energy security.
4. Market structure and competitive situation
With the gradual decline of the subsidy policy, the competition in the new energy vehicle market will become more and more intense. According to the market share data in 2022, BYD's share of the domestic new energy vehicle market reached 31.7%, ranking firmly in the industry leader. In contrast, SAIC-GM-Wuling and Tesla both have a market share of 7.8% in China. In addition, the combined market share of new EV manufacturers such as NIO, Xpeng, and Li Auto reached 6.9%, although the growth rate is obvious, but the overall share is still low.
With the gradual withdrawal of the subsidy policy, market competition will enter a new stage. The original market advantage of relying on policies will gradually disappear, and enterprises must compete for market share through technological innovation, brand influence and channel construction. Leading companies such as BYD, NIO, Li and Xiaopeng have invested heavily in R&D and market layout, and the focus of future competition will focus on intelligence, battery life, charging infrastructure construction and other aspects.
For new forces, how to break the competitive barriers of traditional car companies is the key to future market competition. Especially in terms of intelligent networking and autonomous driving technology, whoever can make the first breakthrough is likely to have an advantage in the competition. The market in the next few years will be a competition with technology as the core, and whoever can stand at the forefront of technological innovation will be able to stand out in the fierce market.
5. Editor's Views & Observations
From a personal point of view, the editor of China Exportsemi believes that the Ministry of Finance issued subsidy funds in advance is the country's firm support for the new energy vehicle industry, and it is also a far-reaching layout for the future development of the industry. The implementation of the subsidy policy not only helped the company through the initial market cultivation period, but also promoted the continuous breakthrough of new energy vehicle technology. However, with the gradual decline of subsidies, companies must accelerate their transformation and rely on independent innovation and market competitiveness to win market share in the future.
More importantly, the subsidy policy is not static, it will be dynamically adjusted according to market demand, technological progress and environmental changes. The government needs to continuously monitor the effectiveness of subsidy policies, ensure the efficient use of funds, and adjust policy direction in a timely manner according to market changes. In addition, enterprises should also grasp the two key areas of technology research and development and brand building to cope with the increasingly fierce market competition.
6. Summary
The subsidy policy for new energy vehicles issued by the Ministry of Finance in advance not only injects financial support into the industry, but also provides strategic guidance for the future development of the industry. This policy will accelerate the innovation of new energy vehicle technology and industrial upgrading, while having a positive impact on environmental protection and energy security. With the gradual decline of the subsidy policy, enterprises must accelerate the market-oriented transformation, enhance the ability of independent innovation, and seize the competitive highland of the future market. In the market competition in 2025, whoever can make a breakthrough in technological innovation will be able to occupy a dominant position in the fierce market environment.
