According to the news, as of May 2025, China's new energy vehicle (NEV) market continues to explode and has become the core force driving the innovation and growth of the semiconductor industry. This article provides an in-depth analysis of market data, technological progress, industry collaboration, and supply chain challenges, and integrates comments and opinions into the analysis, in order to provide more convincing and enlightening insights for industry professional media.
Ⅰ. China's new energy vehicle market: scale, growth rate and penetration
1. Breakthrough growth in sales volume and penetration
According to the China Passenger Car Association (CPCA), China's retail sales of passenger cars in May 2025 reached 1.96 million units, a year-on-year increase of 14%, of which 1.021 million new energy vehicles were sold, an increase of 28%. For the first time, the monthly sales mark exceeded 1 million units, and the penetration rate reached 52.9%. This not only proves the triple drive of policy dividends, price competition and consumption upgrading, but also marks the official entry of new energy vehicles into the "mainstream market" stage.
2. Structural differentiation: the division of power and bullets and the pattern of manufacturers are clear
In May, the sales volume of pure electric vehicles (BEV) was 607,000 units, an increase of 22.6%, accounting for about 60%; Plug-in (PHEV+EREV) sales were 414,000 units, up 34.1% year-on-year. In terms of brands, BYD's retail sales in May were 293,000 units, accounting for 28.5% of the market; Geely soared 132% year-on-year, and the three-legged pattern of full strength has emerged.
3. Strong exports and deepening global penetration
In May, 200,000 new energy vehicles were exported, up 80.9% y/y, accounting for 44.6% of China's passenger car exports. From January to May, a total of 2.49 million vehicles were exported to China, a year-on-year increase of 7.9%; Among them, 855,000 new energy vehicles were used, an increase of 64.6% year-on-year. The export performance is particularly impressive, and it has become one of the important ways for Chinese automakers to achieve internationalization.
Image: As of May 2025, China's new energy vehicle (NEV) market continues to explode
Ⅱ. Technological innovation promotes product strength improvement and differentiated competition
1. Battery technology: a two-wheel improvement in energy density and safety
CATL's Kirin battery achieves a 13% increase in battery life by optimizing the cooling structure and high-energy-density materials. (Models with a range of more than 1,000 kilometers have been mass-produced) BYD blade battery strengthens the structural design to achieve higher space utilization and safety. Both of them directly enhance the competitiveness of vehicle products, reduce the anxiety of battery swapping, and help sales continue to rise.
2. Intelligent driving and cockpit: The chip is at the right time
* Huawei's ADS 2.0 platform has completed the implementation of sensor fusion and high-level assisted driving capabilities, and has millimeter-level positioning capabilities on urban roads and high-speed environments.
* Xpeng's intelligent cockpit system based on its Transformer + neural network architecture has realized multiple functions such as OTA, voice control, and intelligent navigation, and integrated multi-domain controllers and application processors.
The increase in the penetration rate of intelligence has stimulated consumers' demands for scientific and technological content, and at the same time, it has also accelerated the trend of chip architecture towards vehicle specification level and heterogeneous collaboration.
Ⅲ. The explosive growth of the semiconductor industry and the challenges of supply and demand
1. The market size is expected to skyrocket
According to SEMI data, the global automotive chip market is expected to reach $80 billion in 2025, with an annual growth rate of about 20% and a semiconductor gap of about 15%. Infosys expects the automotive semiconductor market to grow from $51 billion in 2025 to $102 billion in 2034, at a compound annual growth rate of 8%, and the BEV segment will grow at a compound annual growth rate of up to 30%.
2. Supply chain structure adjustment and innovation bottleneck
At present, the supply and demand of automotive chips are still unbalanced: the demand for high-end ADAS SoCs, millimeter-wave radar chips, and high-performance MCUs has increased significantly, and it often takes several years to add new production capacity. Judging from the history of supply chain shortages, car manufacturers still rely heavily on mature process (≥40nm) chips. The CEO of ASML also mentioned that maturity nodes are still indispensable in the automotive industry.
3. Policy tends to be two-wheel driven: import substitution and localization support
In the "15th Five-Year Plan", the electric vehicle policy clearly states that the local procurement of automotive chips will account for 20-25% in 2025. Up to now, about 15% of the automotive-gauge chips of independent brands in the field of mixed-signal and power semiconductors have achieved self-production, and the proportion is expected to increase significantly.
Ⅳ. a new model of cooperation between automobile manufacturers and semiconductors
1. The self-research system of car companies has begun to take shape
BYD has established a semiconductor subsidiary to mass-produce IGBT modules. Horizon, Black Sesame Intelligence, and SemiDrive Technology have respectively deployed intelligent driving SoCs and AI domain controllers to promote the increase of domestic automotive-grade semiconductors.
2. Joint development to promote collaborative innovation
SAIC Motor and Horizon have cooperated in the development of domain controller platforms, Chery has cooperated with SiEngine in SoC projects, and BYD has built a "battery cell-smart core-car core" trinity ecology to accelerate the adaptation and certification efficiency of domestic chips and vehicles.
3. The advantages of supply-side docking are emerging
Domestic wafer manufacturing is expanding, and China's basic material resource chains such as Huali and JECT are complete, and with the national subsidy policy, it is expected to break through the supply bottleneck of mature nodes in the future.
Ⅴ. Deep thinking: from insufficient cost to industrial restructuring
1. The cost of chips per car has skyrocketed
Under the combined effect of intelligence and electrification, the cost of chips for new energy vehicles has risen from $400 to $1,500-2,000 for traditional fuel vehicles. The increase in the proportion of chip cost means that semiconductors are no longer a supporting role, but have become the core cost driver of intelligent networked vehicles.
2. Domestic substitution goes hand in hand with globalization
Although domestic chips are widely used in power management, MCU, and sensor products, high-end SoCs are still dominated by NXP, Infineon, TI, and NVIDIA. Under the dual strategy of China's policy and market, the share of imports will be gradually replaced by domestic production, but the global supply chain will still coexist, forming a new ecological pattern.
3. The industrial window period and risk pressure coexist
China's new energy vehicles going overseas will drive the demand for domestic vehicle specification chips in overseas markets. At the same time, the risk of technology and trade conflicts between China and the United States still exists, and semiconductor companies need to take into account compliance, innovation and internationalization at the same time.
Conclusion
China's new energy vehicle market has achieved a monthly penetration rate of more than 50% in May 2025, and the annual cumulative penetration rate is close to 44%, which is not only the result of the green revolution and consumption upgrading, but also means that the car has entered a new era of intelligence. This wave is driving the semiconductor industry to rapidly shift from "passive filling" to "active leadership": from power supply and electronic control to intelligent cockpit, from chip packaging to vehicle collaboration, China's semiconductor industry has become an indispensable and important force in the global intelligent vehicle ecosystem.
The future is promising: when the intelligent cockpit is smoother, the autonomous driving is more reliable, the battery swap is more efficient, and the replacement rate of domestic chips continues to rise, this will open a golden window for the semiconductor industry, and at the same time, it will also test the comprehensive ability of process research and development, core collaboration and global industrial chain integration. Only by deepening cooperation and steadily making technological breakthroughs can China's semiconductors truly promote the global intelligent vehicle industry to a new height.
