IDC: Top 10 Insights into the Chinese Automotive Market in 2025

Recently, based on the latest trends in the technology industry and the development of the Chinese automotive market in recent years, IDC has made predictions for the market in 2025. It mentioned that with the advancement of high-voltage fast charging technology from 4C to 4C+ and the mass production of semi-solid-state batteries, the shortcomings of new energy vehicles are gradually being addressed. The development of battery management technology has expanded the design flexibility of battery packs, providing manufacturers with greater innovation space in solving battery life and operating condition constraints. IDC predicts that the market size of new energy vehicles in the Chinese automotive market will reach nearly 14 million vehicles by 2025. Insight 1: The attributes of travel services are prominent, and intelligent driving drives innovation in the automotive market business model. In China, the passenger vehicle market has entered an era of vehicle ownership, and the model based on providing services to consumers with a single VIN (Vehicle Identification Number) will gradually transform. Manufacturers are starting to provide services based on the vehicle owner's lifestyle. The development of intelligent driving has accumulated potential for further development in this transformation. In the first half of 2024, RoboRun shifted from a regional demonstration in Wuhan to a city-level application. In October, Tesla heavily promoted its autonomous driving fleet business at a press conference, and in November, Xiaoma Zhi Xing went public on NASDAQ. Top domestic dealership groups have also shifted from traditional luxury vehicle brands to technology-backed new forces in the automotive market, injecting new energy into the development of business models for fleet operations. Insight 2: The coverage of high-level driving assistance functions is expanding, and intelligent driving functions demonstrate high user stickiness. With the continuous expansion of the areas covered by high-level driving assistance functions in urban areas, the fragmented scenes where mature driving assistance functions such as high-speed driving, roundabouts, and parking lots are gradually being connected, and the integrity of high-level driving assistance functions is continuously improving. Through the observation of user behavior data, we found that mature driving assistance systems have developed high user stickiness, once users start using them, they tend to open these functions as much as possible. This will accelerate the coverage of edge scenarios by autonomous driving algorithms, enabling existing high-level driving assistance functions to further develop. Insight 3: The proportion of new energy vehicles will continue to rise, and battery technology applications are becoming increasingly flexible and diverse. With the advancement of high-voltage fast charging technology from 4C to 4C+ and the mass production of semi-solid-state batteries, the shortcomings of new energy vehicles are gradually being addressed. The development of battery management technology has expanded the design flexibility of battery packs, providing manufacturers with greater innovation space in solving problems such as battery life and operating condition constraints. The research and development of batteries for plug-in hybrids and range-extending electric vehicles are also receiving appropriate resource allocation among the top power battery manufacturers. IDC predicts that the market size of new energy vehicles in the Chinese automotive market will reach nearly 14 million vehicles by 2025. Insight 4: The proportion of plug-in hybrid electric vehicles in new energy vehicles will continue to rise. As an important interim powertrain mode in the electrification process of the automotive market, plug-in hybrid electric vehicles will continue to contribute the most prominent growth rate to the market of new energy vehicles in 2025. The proportion of plug-in hybrid models in new energy vehicles will continue to increase. The iteration of the chassis intelligent control system is rapidly bridging the functional and handling differences between gasoline vehicles and new energy vehicles, making the transition from gasoline vehicle users to the new energy vehicle market smoother. Insight 5: Range-extending electric vehicles will open up a more diverse niche market. Range-extending electric vehicles, which are firmly established in the high-end SUV market, are not only subtly influencing users in the Chinese passenger vehicle market in terms of car usage philosophy but also demonstrating the feasibility of the range-extending powertrain mode in terms of technology. Brands such as Xiaopeng and Zhiji are planning to introduce range-extending models in 2025. The range-extending powertrain mode will occupy a place in more diverse vehicle forms and a wider price range. Insight 6: The technological elements of the pure electric market continue to improve, and the influence of Internet companies expands. The fierce competition among new energy vehicle companies not only drives the market towards the concentration of top companies but also shapes the usage scenarios of pure electric models. The strong entry of technology companies has added new variables to the potential development direction of the automotive market: Xiaomi Cars had a good start in the 200,000-level sedan market and has announced its plan to enter the SUV market by 2025; Huawei will further improve its layout in the SkyNet series with the SmartNet, EnjoyNet, and RespectNet. Consumer car concepts will continue to evolve, and the transformation of cars from transportation tools to travel spaces will continue. Insight 7: The impact of rear-seat entertainment on consumer car purchase decisions will continue to increase. The development of the long-term usage scenarios of electric vehicles is influenced by various factors, including the commercialization of solid-state battery technology, the expansion of the charging and battery swap system, the coverage of public transportation infrastructure on citizens' travel scenes, and the reshaping of user travel demands by long-distance communication applications. The development of scenarios such as mobile office and remote education is increasingly eroding the rigidity of travel needs, and the focus of user demands is gradually shifting from drivers to passengers. From in-car work to children watching movies in the car, the rear-seat entertainment experience will receive more consideration from consumers when purchasing cars, and its influence will not be limited to the design of the second-row screen but also be influenced by various elements such as rear-seat space and seat comfort. Insight 8: Continuous innovation in multimodal interaction scenes, centered on voice interaction. The integration of cabin gesture recognition and voice interaction indicates that human-machine interaction has completed the transformation from information transmission to intelligent perception. The picking up of information in the cabin by the vehicle is beginning to extend from voice, facial, and gesture recognition to more complex dimensions such as emotions and health conditions. Multi-modal systems are further developing towards more detailed areas around voice interaction, providing more comprehensive satisfaction to diverse segmented user needs. IDC data shows that the penetration rate of voice interaction in the Chinese passenger vehicle market had already reached close to 85% in 2023, and multimodal interaction will promote the further development of interaction modes on a wide range of functionality. Insight 9: The low-altitude eVTOL sector shows good development momentum. Many automakers, including traditional car companies and new forces, showcased their layouts in the eVTOL field at the 2024 Guangzhou Auto Show. As one of the carriers of the low-altitude economy, eVTOL will achieve trial operations in multiple cities in 2025, bridging the gap between road traffic and low-altitude operations in the long term.The early exploration of eVTOL will pave the way for the future of transportation. As one of the components of future transportation, eVTOL will further enrich consumers' travel ecosystem and increase touchpoints between travel scenarios and consumers.Insight Ten: Overseas Layout Strengthens Supply Chain Resilience Following the achievement of becoming the world's top exporter of automobiles in 2023, Chinese automobile manufacturers have diversified their overseas layout. The international expansion model now includes not only complete vehicle exports, but also exports of spare parts, overseas factory establishment, brand mergers and acquisitions, as well as deep cooperation with dealers networks around the world. In 2025, more overseas manufacturers will begin production, continuing to drive the further internationalization of the entire supply chain system, and creating stronger synergies between domestic and overseas operations.