China no longer needs "dumb cars"—Germany still produces them
According to Germany's Focus magazine, China is phasing out subsidies and reorganizing its automotive market. Meanwhile, new energy vehicles (NEVs) and car exports are booming, while German automotive brands continue to decline. Why? Because China no longer needs "dumb cars"—but Germany keeps manufacturing them.
German automotive analyst Philipp Raasch observed: China's auto industry has never been stronger than it is today—car exports have hit record highs; Chinese brands now hold record market shares domestically; and the share of new energy vehicles has also reached historic levels.
Raasch analyzed that China actually has two distinct automotive markets. The decline in traditional internal combustion engine (ICE) vehicles is significantly greater than that of new energy vehicles. As a result, the entire automotive market is increasingly shifting toward new energy vehicles.
The fact is: new energy vehicles (NEVs) surpassed ICE vehicles as early as 2024; pure electric vehicles (BEVs) only first exceeded ICE vehicles in April 2026. Plug-in hybrid electric vehicles (PHEVs) explain this seemingly contradictory trend.
Individually, BEVs and purely fuel-powered cars each still account for less than 40% of market share. But when BEVs and PHEVs are combined—i.e., new energy vehicles—the total market share has already reached 63%.
The government is reducing subsidies, yet the market share of NEVs continues to rise. This indicates that the transition to NEVs is now self-sustaining through market forces alone.
Here is a crucial development: In China, fuel-powered vehicles and new energy vehicles are not just different powertrain types. They have actually evolved into two entirely separate automotive markets with completely different participants.
In the fuel-powered vehicle market, foreign brands still dominate. Volkswagen and Toyota are competing for an ever-shrinking market.
In the new energy vehicle market: this market is now larger and is largely controlled by Chinese enterprises.
At first glance, the difference between these two markets appears to be merely the powertrain. But in reality, it's far more complex. In China, what truly matters in a new energy vehicle is software and artificial intelligence. The Chinese refer to such vehicles as “Smart Cars”—intelligent cars.
Therefore, China’s automotive market today is no longer simply “ICE cars vs. EVs,” but rather “dumb cars vs. smart cars.”
If we examine the best-selling models, the contrast between these two markets becomes evident: Only three automakers appear on both the top ten list for ICE vehicle sales and the top ten list for NEV sales: Geely, SAIC Motor, and Changan—all Chinese companies. No foreign brand has managed to make it onto both lists simultaneously.
German automotive brands are virtually absent from the NEV market. Even in the shrinking ICE vehicle market, German brands are losing market share. And so far, no German brand has successfully entered the rapidly growing NEV market.
Looking at another set of data: From January to May, the number of cars purchased by Chinese consumers declined by over 20%. However, during the same period, the number of cars produced in Chinese factories fell by only 4.2%. So who bought all these vehicles? The answer is: not Chinese consumers—but customers around the world.
China’s car export figures from January to May: 4 million vehicles exported, a year-on-year increase of 63%; in May alone, 930,000 vehicles were exported, setting a new monthly record. Of these exports, 45% were new energy vehicles—up from just 15% in 2021.
The largest car exporter in China is Chery—not BYD, as many might assume.
Source: rfi
Original article: toutiao.com/article/1873744193757200/
Disclaimer: The views expressed in this article are those of the author.