At the press conference of the Ministry of Ecology and Environment on February 24, 2025, a blockbuster news aroused widespread concern in the industry: China will benchmark the advanced regulations of Europe and the United States and formulate the National VII standard for light vehicles and heavy vehicles. This measure not only demonstrates China's determination to control pollution from mobile sources, but also indicates the comprehensive acceleration of the green transformation of China's automobile industry. In the competitive landscape of the global automotive industry, the formulation of China VII standards may make China one of the leaders of the world's most stringent emission standards, promoting industry technology upgrading and market change.
1. The serious challenge of mobile source pollution
Mobile source pollution has become an important source of air pollutant emissions in China. According to Li Tianwei, director of the Department of Atmospheric Environment at the Ministry of Ecology and Environment, nitrogen oxides and volatile organic compounds (VOCs) emitted from mobile sources account for 60% and 24% of the country's total, respectively. Against this backdrop, strengthening the regulation of motor vehicle emissions is key to improving air quality. China has eliminated nearly 50 million high-emission vehicles ahead of schedule, and the sales of new energy vehicles have accounted for more than 40%, ranking first in the world for the tenth consecutive year, and the number of vehicles in the emission stage of China V and above has reached 53%. These data show that China has achieved remarkable results in reducing high-emission vehicles, but in the face of increasingly severe environmental challenges, it is urgent to further upgrade emission standards.
2. China VII Standards: The World's Most Stringent Emission Standards?
The formulation of the China VII standard aims to achieve the integration of emission control technology with the world's advanced level. The implementation of this standard will put forward higher requirements for the technological innovation ability of automobile enterprises. For example, the improvement of engine combustion efficiency and the improvement of exhaust after-treatment technology require enterprises to increase R&D investment. It is estimated that the implementation of the national VII standard will increase the production cost of light vehicles and heavy vehicles by about 2,000 yuan and 5,000 yuan respectively. However, the increase in costs has not stopped the pace of technological innovation of enterprises. CATL, for example, reduced carbon emissions per unit of product by 8.5% in 2019 through the deployment of environmental protection projects. This shows that through technological innovation, companies can not only meet stricter emission standards, but also have an advantage in the market competition.
Figure: China will benchmark the advanced laws and regulations of Europe and the United States, and formulate the national seven standards for light vehicles and heavy vehicles
1. The green transformation of China's auto industry is accelerating
The implementation of the national VII standard will provide a larger market space for the development of new energy vehicles. In 2024, new energy vehicles will account for more than 40% of sales, ranking first in the world for the tenth consecutive year. This trend shows that new energy vehicles have become an important growth point for China's auto industry. With the advancement of the China VII standard, the market demand for new energy vehicles will be further expanded. For example, the implementation of the strategy of "retreating from four, governing five, managing six, and promoting new" for heavy trucks will accelerate the alternative application of new energy heavy trucks. This will not only help reduce the number of high-emission vehicles, but also promote the rapid development of new energy vehicle technology.
2. Technological innovation and market opportunities
The formulation of the China VII standard will prompt automobile companies to accelerate technological innovation and product upgrading. In terms of technological innovation, enterprises need to develop more efficient engine combustion technology and exhaust gas after-treatment technology. Volvo, for example, is working with SSAB to develop the world's first car made of fossil-free steel, with plans to start commercial production in 2026. This cooperation will not only help reduce carbon emissions in the production of automobiles, but also improve the company's competitiveness in the market. In terms of market opportunities, the implementation of the China VII standard will bring more development opportunities for new energy vehicle companies. For example, Great Wall Motors announced that it will achieve carbon neutrality by 2045, which not only reflects corporate social responsibility, but also attracts more environmentally conscious consumers.
3. Policy supports and market supervision
The implementation of the National VII standard is inseparable from the government's policy support and market supervision. The government should increase investment in research and development of motor vehicle emission control technology, and encourage enterprises to cooperate with scientific research institutions and universities. At the same time, corresponding policy measures, such as financial subsidies and tax incentives, should be introduced to encourage enterprises to accelerate technological innovation and product upgrading. In terms of market supervision, the government should strengthen supervision in the field of motor vehicle emission inspection and resolutely curb fraud. For example, the Ministry of Ecology and Environment will continue to promote the special rectification of third-party institutions in the field of motor vehicle emission inspection to ensure the smooth implementation of the China VII standard.
4. Raising public awareness of environmental protection
The implementation of the China VII standard also needs the support and cooperation of the public. With the improvement of environmental awareness, more and more consumers have begun to pay attention to the emission standards and environmental performance of automobiles. According to the survey, green consumption has become the "favorite" of young people. This shows that the public acceptance and demand for environmentally friendly products is increasing. Automobile companies should seize this trend and increase the research and development and promotion of environmentally friendly products to meet consumers' demand for green travel.
5. International Comparison and Competitiveness Improvement
Globally, the requirements for motor vehicle emission standards are also increasing. For example, the European Union has implemented Euro VI standards and plans to further upgrade emissions standards in the future. The U.S. is also pushing for stricter emissions regulations. The formulation of the China VII standard will bring China's emission standards in line with the international advanced level and enhance the international competitiveness of China's automobile industry. According to the China Automotive Industry Development Report (2023), the internationalization process of China's automotive industry has entered a critical stage. Through the implementation of the national VII standard, China's automobile industry is expected to occupy a more favorable position in the global market.
6. Market analysis and future outlook
In 2025, China's automotive industry is standing at a historic turning point. Driven by the "dual carbon" goal, technological revolution, consumption upgrading and global competition, the market structure has been reconstructed at an accelerated pace. Zhongyan Puhua predicts that the overall sales volume will maintain a slight growth of 3%-5% in 2025, with a total of about 32 million units, of which new energy vehicles account for more than 50%, and the share of fuel vehicles will continue to shrink. This trend shows that new energy vehicles will become the mainstream of the future market. With the implementation of the China VII standard, the market share of new energy vehicles will be further expanded, promoting the green transformation of China's automotive industry.
7. Conclusion
The formulation and implementation of the China VII standard is an important milestone in the green transformation of China's automotive industry. Through technological innovation, policy support and market supervision, China is expected to achieve the sustainable development of the automotive industry under the guidance of the world's strictest emission standards. In the face of this historical opportunity, automobile companies should take active actions to increase R&D investment, improve technical level, and meet market demand. At the same time, the public should also enhance their awareness of environmental protection, choose green travel methods, and jointly promote the green transformation of China's auto industry.
