The new energy vehicle market hides a wealth of secrets. Do you understand its two major characteristics?

The new energy vehicle market hides wealth secrets. Do you get the two major characteristics? On May 14, the China Electric Vehicle Hundred People’s Association and Ries Strategic Consulting jointly released the “New Species, New Concepts, New Trends-Insights and Forecasts on New Energy Vehicle Consumption (2024-2025)” report. This report is like a beacon, illuminating the future development direction of the new energy vehicle market for us and revealing many new trends worthy of attention.
High-speed development, the rise of sinking markets
At present, the global core automobile market is approaching saturation, and my country’s automobile market has also entered a stock competition, but the new energy vehicle market has risen against the trend. The report predicts that the sales volume (including exports) of new energy vehicles will reach 16.5 million in 2025, with a growth rate of 30%, and the domestic market penetration rate will exceed 55%; the penetration rate will exceed 70% in 2030.
The new energy consumer market is undergoing structural changes, and the demand for replacement purchases has become the core driving force, and consumer demand has shifted from “whether there is” to “how good”. The post-90s generation has become the main car buyers, and the proportion of the post-00s generation has increased. Consumers pay more attention to the practicality and functionality of products, so domestic brands are more popular. It is estimated that the market share of independent brands will exceed 65% in 2030.
At the same time, new energy vehicles are accelerating to sink to third-tier and lower cities. In 2024, the sales growth rate of third-tier and lower cities will be 63%, which is 1.6 times that of first- and second-tier cities, accounting for 40% of the new energy market. The travel range of the sinking market is short, and economical pure electric cars are favored. Plug-in hybrid and extended-range models also have great potential due to their low dependence on charging facilities. The two account for 46% of the new energy market in third-tier and lower cities, which is higher than that in first-tier cities.
With the replacement of fuel vehicles by new energy, the market structure returns to mainstream demand. Large-space models have become the mainstream, and the price structure has evolved into a spindle shape. In 2024, the sales of new energy passenger cars priced between 100,000 and 150,000 yuan accounted for 31.3% of the total, and the share increased by 35 percentage points year-on-year. The demand in the mid-range market is large, and the price structure will be further optimized in the future.
Generation Z is on the scene, and the “battle for mind” has become a breakthrough point
Generation Z has about 250 million people, with a consumption scale of about 5.97 trillion yuan, and its potential in the automobile consumer market is increasingly prominent. How to grasp its consumption psychology and characteristics is the key to the continued growth of new energy companies.
He Songsong, partner of Ries Strategic Consulting China, pointed out that the younger generation is confident in new energy vehicles, and the combination of driving assistance functions is an important consideration for car purchases. They first buy “self-pleasing” and then replace them with “family-pleasing”, and also form a new model of online car selection and offline car purchase.
He Songsong believes that car companies should take technological leadership, scenario-based, and youthful as breakthroughs to establish advantages in the “battle for mind”. He proposed that the three core battlefields for car companies to win the second half of the new energy are the battle of mind, market, and technology, and gave two strategic suggestions.
The first is to create new categories. Car companies should grasp the mental gap based on consumer demand and focus on segmented scenarios, such as family travel and young self-pleasing. Ideal has successfully attracted the target group by creating the “luxury six-seat smart electric SUV” category.
The second is to accelerate overseas expansion. China’s new energy industry chain is 2-3 generations ahead of Europe and the United States in terms of cost and technology, and the three-electric and intelligent driving patents account for more than 60%. Chinese new energy vehicle brands are expected to become the “joint venture leader” in the new energy era, relying on the mental potential of global brands to feed back to the domestic market.
“New energy vehicles are a technological revolution, but also a cognitive revolution.” Automakers need to use category thinking to reconstruct competition, and establish a unique label in the minds of consumers through technological equality, scene segmentation and brand potential enhancement. In the future, the new energy vehicle market is full of opportunities and challenges, and it is worth looking forward to!