EVs lose their special status as China redirects its strategy toward quantum, hydrogen and bio-tech, confronting oversupply and fierce competition in its once-favoured sector.
China has dropped electric vehicles from its list of priority strategic industries for the first time in more than ten years, signalling a shift in national industrial planning. According to a Reuters report, the country is confronting overcapacity and fierce competition in the sector.
The update appears in Beijing’s 15th five-year development blueprint for 2026-2030, released by state media on Tuesday. Unlike previous plans, new energy vehicles, including battery EVs, plug-in hybrids and fuel-cell cars, are no longer categorised as ‘strategic emerging industries.’
Instead, the government has highlighted alternative growth areas such as quantum technologies, bio-manufacturing, hydrogen energy and nuclear fusion. Policymakers are also urging measures to boost consumer spending, naming car purchases alongside housing as areas where restrictions should be eased.
The full plan will be formally presented at China’s parliamentary meetings in March.
Since 2009, lavish central and local subsidies have reportedly propelled China to global leadership in electric vehicle production and supply chains. The country now accounts for the world’s largest car market and dominates battery manufacturing.
However, the rapid growth has led to a glut of production capacity. A prolonged price war, hundreds of competing brands and weakening domestic demand have increased financial strain on manufacturers. Export momentum, once seen as a solution, is now challenged by rising trade frictions with the United States and Europe.
President Xi Jinping has repeatedly warned against blindly pursuing the same industrial priorities across all provinces. Commenting on the new strategy, he emphasised the need for ‘rational and realistic’ investment, cautioning against what he described as a rush into every newly emerging technology sector.
Cities previously unknown for automotive manufacturing, including Hefei and Xi’an, have transformed into EV hubs over the past decade. Now, policymakers are signalling a pivot towards more selective development, as China prepares for a future shaped not solely by electric mobility, but by broader technological competition.
