China Omits Mention Of New Energy Vehicles In Latest 5-Year Plan – CleanTechnica

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Sales of “new energy vehicles” — battery electric, plug-in hybrid, or fuel cell powered — in China are setting new records month after month. For years, the US, Canada, and Europe have been complaining loud and long about how much China subsidizes its automobile manufacturers — as if the US hasn’t propped up its domestic car industry for decades and Germany has not offered a helping hand from time to time to Mercedes, BMW, and Volkswagen.

Nevertheless, China does provide significant assistance to its auto manufacturing sector, although often indirectly. It promotes science and engineering education so companies will have access to talented researchers and engineers. It prioritizes national supply chains for battery materials and rare earth materials so there will be batteries and electric motors and software available to build electric cars. Other countries could have done the same but elected not to.

The US, for instance, was an early leader in battery and solar panel production, but stood idly by as China leveraged those technologies. Republicans couldn’t stop hooting with derision when Solyndra, a domestic solar panel manufacturer supported by the Obama administration (and initially the Bush administration), went belly up. But China saw the potential of solar power and committed to making it commercially viable. Now the US is boohooing about how China can make solar panels so cheaply, but in fact it allowed it to happen as part of a general Republican antagonism to renewable energy in all forms.

A hallmark of China industrial policy is the 5-year plan. The focus of US industrial policy is the 5-minute plan. China establishes clear goals and then makes rational plans to achieve those goals. The US shifts gears up.    every four years, going full speed in one direction, only to reverse course and race full speed in the other direction when it elects a new leader. “If you fail to plan, you plan to fail” is an old maxim that nobody in America seems to pay the slightest attention to.

China Unveils Next 5-Year Plan

China has just announced its latest 5-year plan, and according to Reuters, it makes no mention of new energy vehicles, which everyone assumes means direct financial support for zero-emissions vehicles will be coming to an end shortly. It does not mean, however, that China will stop supporting higher education or protecting its supply chain dominance.

Electrive says the omission of NEVs marks a shift towards market-driven growth, according to industry analysts. NEVs were listed as strategic industries in the last three 5-year plans, which unlocked billions in subsidies that supported both automakers and consumers and bolstered the fortunes of BYD and CATL. Now China apparently has decided its car industry can stand on its own two feet.

In September 2025, 1.6 million NEVs were sold in China, reaching a market share of 49.7 percent — a new record. Battery electric vehicles also set a new record at 1,058,000 units — the first time more than a million battery electric cars were sold in China. With those figures in mind, analysts believe that Beijing considers the industry to be mature enough to do without subsidies and leave further development up to market forces.

“It’s an official acknowledgement that electric vehicles no longer need prioritized policies. Electric vehicle subsidies will fade,” Dan Wang, China director at consultancy Eurasia Group, told Reuters. “China already dominates in EV-related tech and batteries, so there is no point prioritizing it. It doesn’t mean the government will require capacity to be cut, but the market will play a bigger role in deciding who survives.”

Thanks to the incentives in those past three 5-year plans, China reached its goal of selling more than 50 percent NEVs ten years ahead of schedule, which is a clear indication of the power of planning. But having its domestic car industry focus all its attention on complying with government policy instead of consumer demand has resulted in Chinese manufacturers cranking out twice as many cars as there are customers for.

For instance, research by Jato Dynamics shows that 93 of China’s 169 carmakers have market shares below 0.1 percent. “From the country’s point of view, it is no longer necessary to pay too much attention (to NEVs), or it may lead to greater overcapacity,” said Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics.

Experts say omitting NEVs from the new 5-year plan should not be seen as a sign that the EV industry has fallen out of favor in Beijing. Instead, it reflects a strategic decision to allocate resources to other technologies where China wants to increase its capabilities, especially in light of global trade and security tensions.

Where China Wants To Go Next

The latest 5-year plan was published by the official Xinhua News Agency on October 28, 2025. It prioritizes quantum technology, bio-manufacturing, hydrogen energy, and nuclear fusion as new drivers of economic growth. Xi Jinping has said all along the country’s goal is to become self-sufficient in critical technologies and cut any reliance on foreign nations.

A policy adviser quoted by Reuters said the exclusion of NEVs “is not to say they’re not important — they absolutely are. Just look at our exports, the source of profits for the entire auto sector, the boost to the industrial chain, and our global leadership. NEVs are undoubtedly important.”

In July, S&P Global reported that national and local governments in China are now planning to spend $2 trillion to upgrade key tech industries. Some of that funding will also go to developing solid-state batteries, vehicle intelligence, and autonomous driving technologies. Cui Dongshu, secretary-general of China’s Passenger Car Association, said Chinese policymakers will now push EV makers to focus on delivering more innovative products and reduce the production of low quality vehicles.

Shaochen Wang, a research analyst at Counterpoint, told Asia Financials: “Brands like BYD and Leapmotor have strengthened their cost advantages by enhancing supply chain integration capabilities and launched more cost-effective products. Meanwhile, Xiaomi and brands under HIMA (Huawei Intelligent Mobility Alliance) have attracted consumers with their strong brand influence and leading ‘intelligent’ features.”

Turning To Exports And Foreign Markets

In 2024, Chinese automakers invested more in foreign countries than they did in China according to data from Rhodium Group. BYD, Geely, and Great Wall all plan to build factories in Europe, Asia, Latin America, the Middle East, and Africa. Fewer subsidies at home and investments in foreign markets will help calm the fears of foreign governments about heavily subsidized cars from China.

Just this week, Mark Carney, the prime minister of Canada, suggested his country is considering removing the 100 percent tariff that currently applies to Chinese made cars imported to that country. It is likely other countries will follow Canada’s lead if it means more foreign investment and well paying factory jobs.

According to the European Automobile Manufacturers Association, BYD saw a nearly 400 percent increase in sales all across Europe last month, with the UK emerging as the biggest offshore market with an astounding 880 percent increase in sales. Asia Financial adds that part of the reason BYD has been so successful is because of Elon Musk running his mouth incessantly in favor of extreme right-wing groups. In September, Tesla sales in the EU fell by 18 percent, following a 42 percent fall in August.

If you want to know what areas China will be dominant in by 2035, all that is needed is to notice the areas the new plan prioritizes. China has a way of exceeding its goals, so while other are busy whining about what an unfair advantage Chinese companies have, it is busy making its plans a reality.

Nobody should be surprised about what China’s priorities are. They are published where anyone who cares to look can find them. China’s success should be a signal to others that comprehensive, long range plans are essential to a successful economy. As Forrest Gump put it so elegantly, “If you don’t know where you’re going, you’re not likely to end up there.”

The United States would do well to learn that lesson. Bluster and bombast are a poor substitute for effective long range planning.