BEIJING, July 9 (Xinhua) -- For Chinese car buyers, new energy vehicles (NEV) are fast becoming the mainstream choice, with their market share climbing month by month, a momentum that is not only redefining the world's largest auto market but also reshaping the global auto landscape.
In June, NEVs accounted for 67.2 percent of domestic passenger car sales, according to data from the China Association of Automobile Manufacturers (CAAM) released on Thursday. The monthly penetration rate has risen steadily throughout the year, confirming the accelerating transition from conventional fuel-powered vehicles to smart, green mobility.
The trend is also pushing international automakers to adapt their strategies, as they increasingly look to China's vibrant innovation ecosystem to sharpen their competitive edge worldwide. From research and development (R&D) overhauls to local partnerships, global brands are racing to integrate Chinese expertise into their core operations, not just for local sales, but to feed back into their global portfolios.
SUSTAINED MOMENTUM
NEVs continued to solidify their dominance in China's auto market in June, with production reaching 1.598 million units, up 26 percent year on year, while sales hit 1.643 million units, up 23.6 percent, according to CAAM data.
For the first half of 2026, NEV output reached 7.438 million units, while sales stood at 7.446 million units. Pure electric vehicles accounted for 67 percent of the total NEV sales during the period, the data showed.
Exports further underscored the sector's strength. NEV exports reached 523,000 units in June, soaring 160 percent from a year earlier, helping push China's monthly total auto exports past the one-million mark for the first time, at 1.037 million units, up 75.1 percent year on year.
In the first half, cumulative auto exports totaled 5.096 million units, up 65.3 percent, with NEVs contributing over 46 percent of the total.
CAAM Deputy Secretary-General Chen Shihua noted that the auto industry has operated steadily in the first half, with NEVs posting stable growth while traditional fuel vehicles continue to shrink.
Looking ahead, he expects policy support to sustain momentum, though external uncertainties and weak domestic demand remain challenges.
Since 2012, China has implemented preferential vehicle and vessel tax policies to support the growth of the NEV industry and promote energy conservation and emission reduction.
While government subsidies have provided a strong tailwind, the emerging engine of NEV adoption has been surging market demand. Chinese buyers are increasingly drawn to the superior driving experience, smart features, and lower operating costs of electric vehicles, factors that have made NEVs genuinely appealing beyond policy incentives.
"After years of development, China's NEV industry has moved beyond dependence on universal preferential policies and entered a new stage of market-driven and autonomous growth," said Liu Bin, deputy head of the China Automotive Strategy and Policy Research Center.
NEW PLAYBOOK
The rise of China's NEV industry is rewriting the rules of the global auto game. As local brands race ahead with smarter, more connected vehicles, multinational automakers are no longer resting on their legacy advantages, but proactively reshaping their strategies to stay competitive.
Ola Kallenius, chairman of the board of management of Mercedes-Benz Group AG, said in March this year that the company's China R&D strategy has evolved from "in China, for China" to "in China, for the world." This means leveraging China's innovation ecosystem and partnering with leading tech firms -- not just to meet local customer needs, but to turn those capabilities into global advantages.
By April last year, Mercedes-Benz had over 2,000 R&D staff in China, with an upgrade of its Shanghai R&D center to complement its Beijing innovation hub. In September 2025, it expanded its partnership with ByteDance to integrate the Doubao large-language model into its electric vehicles.
BMW, Renault and Toyota have made similar moves. BMW has built its largest R&D network outside Germany in China; Renault has upgraded its Chinese R&D center into a global technology export hub; and Toyota has introduced a China Chief Engineer system to attract local talent.
Meanwhile, a "reverse joint venture" wave is emerging: Chinese NEV startups are joining forces with established European automakers to expand into overseas markets. Leapmotor International, a joint venture between Chinese carmaker Leapmotor and Stellantis, had already exported over 100,000 vehicles to 40 countries and regions as of February 2026. XPeng Motors is likewise leveraging Volkswagen's European sales network to accelerate its global footprint.
"Although multinational automakers are facing some challenges and pressure in China at the moment, the fast-growing consumer market, well-established supply chains, innovative R&D environment and exceptional talent pool are bringing new opportunities for them to expand their investment and lift their partnerships to the next level," said Ma Sheng, a senior researcher at the China Automotive Strategy and Policy Research Center. ■
