Forecasting 2025: A Comprehensive Overview of China’s Hybrid Vehicle Industry (Including Market Status, Competitive Landscape, and Development Trends)

Key Listed Companies in the Industry: BYD (002594.SZ), Li Auto (02015.HK), Seres (601127.SH), Changan Automobile (200625.SZ), Great Wall Motors (601633.SH), Geely (00175.HK), among others.

1. Definition

Hybrid Vehicles are defined broadly as vehicles that combine two or more power sources that can operate simultaneously. The vehicle’s propulsion power is provided by one or multiple systems based on actual driving conditions. In a narrower sense, a hybrid vehicle is equipped with two sources of power: a traditional internal combustion engine (ICE) fueled by gasoline or diesel, and an electric power source consisting of batteries and electric motors. This report focuses specifically on this narrower definition of hybrid vehicles.

With growing environmental awareness and rising fuel costs, hybrid vehicles are increasingly favored by consumers. Currently, hybrid vehicles on the market are primarily classified into three categories: Plug-in Hybrid Electric Vehicles (PHEVs), Hybrid Electric Vehicles (HEVs), and Range-Extended Electric Vehicles (REEVs).

2. Industry Chain Analysis: Core Midstream Segment

The upstream of the hybrid vehicle industry primarily supplies components for midstream vehicle manufacturing, including batteries, internal combustion engines, body parts, chassis, automotive electronics, electronic control systems, and charging stations. The midstream segment focuses on the manufacturing of hybrid vehicles, which can be further categorized into passenger cars, commercial vehicles, and special-purpose vehicles.

The downstream segment consists of charging services and aftermarket services. Charging services include charging equipment, battery swapping equipment, and battery recycling, while aftermarket services include automotive finance, insurance, leasing, second-hand vehicle transactions, maintenance, and dismantling/recycling.

Key players in the upstream industry include battery manufacturers like CATL, BYD, and Contemporary Amperex Technology Co., motors and electronic control companies like BYD, Da Yang Motors, and Jingjin Electric, automotive electronics firms such as Desay SV and Joyson Electronics, and charging station providers like Trina Solar and Kelu Electric.

Midstream hybrid vehicle manufacturers include major companies like BYD, Li Auto, Seres, Changan, Great Wall, and Geely.

3. Industry Development History: Entering a Rapid Growth Phase

The hybrid vehicle industry in China began with policy-driven initiatives, followed by technological accumulation and market development, and is now entering a phase of rapid growth. In the future, supported by favorable policies and technological advancements, hybrid vehicles are expected to play a significant role in the energy-saving and new energy vehicle markets, becoming a key force in China’s automotive industry transition and upgrade.

4. Industry Policy Background: Actively Promoting Development

Over the past decade, various departments have introduced a series of supportive policies to promote the development of China’s hybrid vehicle industry. In April 2020, announcements were made regarding tax exemptions for new energy vehicle purchases and improvements to the financial subsidy policy for promoting new energy vehicles. In November 2020, the State Council released the “New Energy Vehicle Industry Development Plan (2021-2035)”; in 2022, the “Strategic Plan for Expanding Domestic Demand (2022-2035)” was introduced. A summary of key policies follows:

5. Current Industry Development Status

1. Sales Expected to Exceed 7 Million Units in 2024: According to data from the China Association of Automobile Manufacturers (CAAM), the sales of hybrid vehicles in China have shown an upward trend from 2018 to 2024. Since 2021, sales have surged significantly due to the rising popularity of PHEVs and REEVs. By 2024, total sales of hybrid vehicles in China are projected to reach 7.252 million units, representing a growth of 66% year-on-year.

2. Penetration Rate Expected to Reach Approximately 23% in 2024: From 2018 to 2023, the production of hybrid vehicles as a proportion of total vehicle production has been steadily increasing, rising from 1.68% in 2018 to 23.07% in 2024, indicating a growing penetration of hybrid vehicles in the automotive market.

3. Demand for Plug-in Hybrid Vehicles to Account for Approximately 71% in 2024: Between 2018 and 2024, the sales structure of hybrid vehicles has seen a continuous increase in the proportion of PHEVs and REEVs, while the share of HEVs has fluctuated downwards. By 2024, PHEVs are expected to represent about 71% of the hybrid vehicle market, with REEVs at 16% and HEVs at 13%.

4. Market Size Estimated at Approximately 1.3 Trillion Yuan: Data from the China Passenger Car Association indicates that the price ranges for HEVs typically fall between 150,000 and 300,000 yuan, for PHEVs between 100,000 and 200,000 yuan, and for REEVs between 200,000 and 400,000 yuan. Based on average prices of 230,000 yuan for PHEVs, 150,000 yuan for HEVs, and 300,000 yuan for REEVs, the market size for hybrid vehicles in China is projected to reach approximately 1.3 trillion yuan by 2024.

6. Industry Competitive Landscape

1. Brand Competition: The hybrid vehicle market in China is primarily represented by three major segments: Japanese joint-venture HEVs, domestic brand PHEVs, and new energy range-extended vehicles. In 2023, domestic brand PHEVs (excluding range-extended models) captured 51% of the overall hybrid vehicle market, while Japanese HEVs held 22%, and range-extended vehicles quickly gained a 20% market share.

2. Regional Competition: The distribution of enterprises within China’s hybrid vehicle industry is heavily concentrated in regions such as Guangdong and Jiangsu, with Guangdong being the most densely populated area for hybrid vehicle manufacturers.

7. Industry Development Outlook – Market Size Expected to Exceed 4 Trillion Yuan by 2030

While the Ministry of Science and Technology has primarily focused on promoting pure electric vehicles in China, the hybrid vehicle segment remains crucial as the market continues to evolve. Despite a diverse array of new energy technologies in the market, hybrid technology is expected to be the most widely adopted in the near future, as both hydrogen and fuel cell vehicles still seem distant.

The “Energy Saving and New Energy Roadmap 2.0” indicates that by 2025, hybrid vehicle sales should account for over 50% of traditional energy passenger vehicles, increasing to over 75% by 2030 and reaching 100% by 2035. With ongoing technological advancements and cost reductions, coupled with China’s heightened focus on environmental protection and energy conservation, the potential for hybrid vehicles to replace traditional energy vehicles remains significant. The market size for hybrid vehicles in China is expected to continue its upward trajectory from 2025 to 2030, potentially surpassing 4 trillion yuan by 2030.

Conclusion

The specific trends in the development of China’s hybrid vehicle industry are outlined as follows:

For more industry research and analysis, refer to the China Hybrid Vehicle Industry Market Outlook and Investment Strategy Analysis Report. The research institution also provides insights into new industry tracks, investment feasibility studies, industrial planning, park planning, industrial attraction, industry mapping, big data analytics, smart investment systems, industry position proofing, IPO consulting/funding research, and reporting on specialized and innovative small giant enterprises.