The new energy vehicle market in the first half of the year: The product structure and user decision-making logic are accelerating reconstruction amid the slowdown in growth.
In the first half of 2025, while the new energy vehicle market continued to grow, it showed a complex and delicate changing trend. Data from the China Association of Automobile Manufacturers shows that from January to June this year, China's automobile production and sales exceeded 15 million vehicles for the first time. The production and sales of new energy vehicles reached 6.968 million and 6.937 million respectively, with year-on-year increases of 41.4% and 40.3% respectively. New energy vehicles accounted for 44.3% of the total new vehicle sales.
However, beneath the appearance of overall prosperity, the market performance of different technological routes has shown significant differentiation: the growth rate of battery electric vehicles (BEVs) has surpassed that of plug-in hybrid electric vehicles (PHEVs), and the extended-range electric vehicle (EREV) market is facing structural challenges. Meanwhile, consumers' decision-making logic is shifting from "policy-driven" to "value-sensitive", with intelligence, practicality, and cost control becoming the core considerations.
Differentiation of Powertrain Routes: BEVs Surpass PHEVs, PHEVs Under Pressure
There was a time when the new energy vehicle market was booming, with all models advancing side by side and the growth curve rising steeply. But now, some models have begun to feel the pressure of slowing growth.
In the first half of the year, the cumulative sales of battery electric vehicles reached 4.415 million, a year-on-year increase of 46.2%, showing a strong growth momentum. In 2023 and 2024, the growth rates of this segment were 24.9% and 15.5% respectively. Technologically, the continuous innovation of battery technology has injected strong impetus into the BEV market. Lithium iron phosphate (LFP) batteries, with their cost advantages and improved safety, have continuously expanded their installed capacity share, reaching 81.4% in the first half of the year and outperforming ternary lithium batteries. At the same time, the significant improvement in cruising range has further increased consumers' acceptance.
Nowadays, most mainstream BEV models adopt a 400V electrical architecture, combined with a 65 - 85 kWh battery pack. Their cruising range is generally between 450 - 550 kilometers, and some high - end models even have a cruising range of over 700 kilometers. In addition, the gradual improvement of charging infrastructure has also provided strong support for the development of the BEV market. The number of public charging piles is increasing, and fast - charging technology is continuously upgrading, which has alleviated consumers' charging anxiety to a certain extent and promoted the steady growth of the BEV market.
Data from the China Association of Automobile Manufacturers shows that from January to June this year, the cumulative sales of plug - in hybrid vehicles in the Chinese auto market reached 2.521 million, a year - on - year increase of 31.1%. From 2021 to 2024, the growth rates of plug - in hybrid vehicles were 140%, 151.6%, 84.7%, and 84.5% respectively. In comparison, the growth rate of plug - in hybrid vehicles has significantly slowed down.
In China, BYD dominates the PHEV market, and many of its models rank among the top in sales. For example, the BYD Qin L DM - i is equipped with the fifth - generation DM technology, which combines performance and energy efficiency and precisely meets the needs of family users, making it the best - selling plug - in hybrid model. Lin Huaibin, the deputy director of S&P Global Mobility's China light - vehicle sales forecast, said that the share of plug - in hybrid vehicles in 2025 will be lower than that in 2024, and its growth rate will gradually slow down in the next two or three years. By June this year, the inventory of the entire PHEV industry was about 1.04 million vehicles, and leading enterprises have begun to enter a deep de - stocking stage.
The industry generally expects that after 2026, the purchase tax exemption policy may exclude low - range PHEVs with a cruising range of less than 80 - 100 kilometers from the preferential scope, which will undoubtedly have a negative impact on the market performance of some low - range PHEV models.
The extended - range technology has encountered a demand bottleneck, with the lowest growth rate among the three major routes. In the first half of the year, the sales of extended - range vehicles were only 538,000. Li Auto delivered 203,938 vehicles in the first half of the year, a year - on - year increase of 7.9%, but its delivery volume in June decreased by 24% year - on - year. Some analysts believe that one of the core problems is technological redundancy and over - supply. A survey from automakers showed that 70% of extended - range vehicle users have a pure - electric driving mileage accounting for more than 80%, and the utilization rate of the internal combustion engine range extender is less than 15%, which drives up the manufacturing cost without creating real value. At the same time, 24 new extended - range models were added in 2025, and there are more than 50 models on sale. According to statistics, the average monthly sales per vehicle are less than a thousand, and the market shows a divergence between "supply frenzy" and "calm demand".
Currently, when the charging infrastructure is still imperfect, the characteristics of extended - range electric vehicles meet the needs of some consumers. However, some second - tier PHEV models with backward technology (such as single - gear DHT) and a pure - electric cruising range of less than 100 kilometers are facing the double squeeze of "policy regression" and "shrinking demand". The industry expects that the new version of the plug - in hybrid purchase tax exemption policy will raise the threshold to a pure - electric cruising range of 150 kilometers, which will further eliminate low - end production capacity. At the same time, as pure - electric models are priced as low as 100,000 yuan, it is difficult to reduce the cost of extended - range vehicles due to the need to be compatible with the fuel system, and their cost - performance advantage is lost.
The Decision - Making Logic Shifts from Range Anxiety to Value Consensus
In the process of the continuous change of the new energy vehicle market pattern, consumers' purchase decision - making logic has also changed significantly. In the early days, consumers' purchases of new energy vehicles were largely driven by policy subsidies, license plate advantages, etc. Battery electric vehicles, with their "zero - emission" environmental image and relatively simple power system, became the first choice for many consumers. However, with the development of the market and consumers' deeper understanding of new energy vehicles, the factors influencing purchase decisions have become more diversified.
Nowadays, factors such as range anxiety, charging convenience, and the comprehensive performance of vehicles play an important role in consumers' decision - making process. This has highlighted the advantages of hybrid vehicles (including PHEVs and extended - range vehicles). When purchasing a vehicle, consumers no longer only focus on whether the vehicle is purely electric - driven, but pay more attention to whether the vehicle can provide a convenient and efficient travel experience in various usage scenarios.
According to the "2025 New Energy Vehicle Consumption Trend Insight", safety (85.67%), price (71.59%), and usage cost (68.85%) have become the top three factors in purchase decisions, and the attention to intelligent configuration has dropped to 48.6%. The policy side also echoes this: the Ministry of Industry and Information Technology intends to mandate that hidden door handles be equipped with physical emergency switches, forcing automakers to balance aesthetics and safety.
"Intelligence - cost ratio" has replaced "configuration stacking", and users are more willing to pay for practical functions. The monthly active user rate of XPeng Motors' XNGP urban intelligent driving function reaches 85%. However, the demand has become more practical: safety functions such as AEB emergency braking and sentry mode have become necessities, while "showy" configurations such as AR - HUD and gesture control have been marginalized. Although systems such as Huawei ADS 4.0 and Tesla FSD are in fierce competition in terms of hardware stacking, users ultimately pay for technologies that "solve practical pain points".
The deepening stratification of group demand has promoted the refinement of product definition. The decision - making weight of women has increased to 48%, and their focus has shifted from appearance to safety and convenience (the penetration rate of automatic parking and blind - spot monitoring exceeds 70%); family users have driven the explosion of six - seat pure - electric SUVs. In the first half of 2025, the proportion of new energy vehicles in mid - to large - sized SUVs exceeded 65%, and six - seat models contributed 70% of the sales. Families with two or three children have become the core group. This demand has given rise to a "space arms race".
The market data of new energy vehicles in the first half of the year reveals a new industry pattern that is accelerating differentiation: the growth rate of some models has slowed down, and BEVs, PHEVs, and extended - range vehicles show different growth curves in terms of their respective technologies, markets, and user needs. Consumers' purchase decisions are also gradually shifting towards in - depth consideration of safety and diverse travel scenarios.
In addition, the performance of plug - in hybrid vehicles in the overseas market in the first half of the year is also worthy of attention. Cui Dongshu, the secretary - general of the Passenger Car Market Information Joint Conference of the China Automobile Dealers Association, believes that the global automobile market is undergoing an "electrification reshuffle". Chinese plug - in hybrids, with their "technological leadership + cost advantages", are quickly seizing multiple overseas markets. For example, some European countries (such as Germany) have adjusted their policies to include plug - in hybrids in the subsidy scope for "environmentally friendly vehicles", opening a window for Chinese plug - in hybrids to enter the high - end market.
For automakers, accurately understanding the needs of segmented markets, focusing on improving the cruising range and charging experience of BEVs, optimizing the performance and reducing the cost of PHEVs, and strengthening the unique advantages of extended - range vehicles, while actively responding to changes in users' decision - making, and creating products that meet consumers' diverse needs will be the key to standing out in the fierce competition in the second half of the new energy vehicle market.
This article is from the WeChat public account "Automotive Market Insights", author: Yang Shuo. It is published by 36Kr with authorization.