China has excluded electric vehicles (EVs) from its list of strategic industries in the country’s 15th five-year development plan (2026–2030), marking the first time in over a decade that the sector has been omitted. The move signals a major policy shift as Beijing grapples with overcapacity, fierce competition, and deflationary pressures in its once-booming new energy vehicle (NEV) industry.
NEVs—which include battery electric, plug-in hybrid, and fuel cell vehicles—had been designated as strategic emerging industries in the past three five-year plans, receiving billions of dollars in government subsidies that helped China build the world’s largest EV market and supply chain.
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However, the latest plan, released by Xinhua News Agency on Tuesday, shifts focus toward quantum technology, bio-manufacturing, hydrogen energy, and nuclear fusion as new engines of economic growth. Automobiles were mentioned only briefly, grouped with housing, where the government urged local authorities to remove purchase restrictions to stimulate domestic consumption. The full five-year plan is expected to be approved during the National People’s Congress session in March.
The policy adjustment comes as China’s EV industry faces a saturated domestic market, with dozens of brands competing in an ongoing price war that has eroded profitability. Many regions not traditionally known as automotive centers, such as Hefei and Xi’an, have become key EV production hubs in recent years, intensifying competition and straining supply-demand balance.
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In remarks accompanying the plan, President Xi Jinping emphasized the need to avoid excessive investment in overlapping industries, warning against “rushing headlong into new initiatives.” Earlier this year, Xi questioned whether every province needed to develop sectors such as artificial intelligence, computing power, and EVs, according to the People’s Daily.
While EVs remain an important part of China’s green transition, their omission from the upcoming five-year plan underscores a strategic recalibration toward next-generation technologies and a push for more sustainable industrial development amid growing trade tensions with the West and global scrutiny over Chinese EV exports.
