China Excludes Electric Vehicles from Strategic Industries in 2026-2030 Plan

China’s 2026-2030 five-year development plan, released on Tuesday, marks a major shift for the country’s electric vehicle (EV) industry.

For the first time in 15 years, new energy vehicles (NEVs)—including EVs, plug-in hybrids, and fuel-cell vehicles—are not listed among the nation’s strategic emerging industries.

Analysts say the omission reflects Beijing’s belief that the NEV industry has matured and no longer requires the heavy financial support it once enjoyed.

Launched in 2009 as a “strategic and new productive force,” the sector benefited from billions in government subsidies, helping China become the world’s largest NEV market. Last year, NEVs accounted for over 50% of total auto sales—more than a decade ahead of government targets.

However, rapid growth has also created challenges. Many domestic automakers are producing far more vehicles than the market can absorb, with research firm Jato Dynamics noting that 93 of 169 automakers in China hold market shares below 0.1%.

Experts emphasize that this policy shift does not signal a retreat from EVs but rather a strategic reallocation of resources toward technologies such as quantum computing, bio-manufacturing, hydrogen energy, and nuclear fusion.

Chinese policymakers have long intended for the NEV industry to become self-sustaining. Subsidies and tax breaks have been gradually reduced, with the national purchase subsidy program ending in 2022 and tax rebates expected to phase out by 2027.

Going forward, automakers will need to rely more on market competitiveness and innovation. Companies like BYD, Leapmotor, Xiaomi, and brands under Huawei’s Intelligent Mobility Alliance are already leveraging supply chain efficiencies and advanced features to gain an edge.

Industry insiders say the five-year plan encourages EV makers to focus on higher-quality, innovative products and to strengthen core capabilities to succeed in China’s increasingly competitive market.