By HASAN MUHAMMAD

Editor's Note: The writer is a freelance columnist on international affairs based in Karachi, Pakistan. The article reflects the author's opinions and not necessarily the views of China Economic Net.

In 2025, China's vehicle production and sales both exceeded 34 million units, marking the 17th consecutive year as the world's largest market. Within this, NEVs have become the dominant force, with sales surpassing 16 million units last year - accounting for nearly half of all domestic new car sales. Looking ahead, the China Association of Automobile Manufacturers expects NEV sales to hit 19 million units in 2026.

The focus of China’s future-oriented strategy rests on two pillars: next-generation battery technology and intelligent connectivity. While liquid lithium-ion batteries fueled the first wave of electrification, the future belongs to all-solid-state batteries. These offer higher energy density and greater safety, potentially delivering ranges exceeding 1,000 kilometers on a single charge. The race to commercialize this technology is the new "space race" of the energy transition. Chinese researchers and manufacturers are narrowing the gap with global competitors faster than predicted, with major firms like Dongfeng already launching pilot production lines and beginning extreme cold-weather testing this month. The goal is clear: to move these laboratory successes into mass production by the end of the decade.

Parallel to the hardware revolution is the software transformation. The vehicle of the future is increasingly defined as a mobile computer. Advanced autonomous driving and industrial software are becoming the primary differentiators between brands. By prioritizing these sectors, China is positioning itself to set the global standards for how cars interact with cities. This is not just about making a better car; it is about building the digital ecosystem that will govern global mobility.

This transition has profound international implications. Chinese battery companies already command a formidable lead, with six of the top ten global manufacturers being Chinese, collectively accounting for nearly 70 percent of the world's installed power battery capacity. As they move up the value chain, their influence on the global supply chain deepens. To maintain this momentum, the industry is also addressing sustainability through a "full-lifecycle" approach. Starting in April 2026, China will implement strict new battery recycling measures, assigning digital IDs to every power battery to ensure transparency and environmental protection as the first generation of EVs reaches retirement.

The strategy also extends to the most difficult segments of transport to decarbonize: heavy-duty trucks. In 2025, battery-powered models accounted for over 20 percent of new heavy truck sales, a share expected to double by 2027. By modernizing these fleets through battery-swapping technology and standardized packs, the country is creating a feedback loop where policy goals for carbon neutrality drive technological breakthroughs, which in turn create new export opportunities.