Top 10 Ten Technological Trends in China's Automotive Industry

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China's automotive industry aims to become a global leader in innovation. Here’s an overview of the top trends shaping the Chinese automotive market.

China's automotive industry aims to become a global leader in innovation. Here’s an overview of the top trends shaping the Chinese automotive market.

 China's automotive sector is steadily growing and aspires to lead global innovation. "Since 2017, the Chinese have been gaining significant momentum," explained Prof. Stefan Bratzel from the Center of Automotive Management (CAM) during the 2024 Automotive Business Days in Würzburg, Germany. In a conversation with the editorial team of AAIs sisterbrands 'Automotil Industrie' and 'KFZ-Betrieb', the market analyst emphasized, "Software in vehicles is pivotal for all major future fields. Chinese companies, in particular, have made significant strides in innovation here." In a study from autumn of last year, Bratzel predicted that Chinese manufacturers would assume a leading role in automated driving and connectivity in the medium term.

With that in mind, let’s explore the "top trends" expected to dominate the Chinese automotive industry in 2025. This list draws from the latest trend scouting by the China Society of Automotive Engineers (China-SAE) and our own monitoring for the "China Market Insider" series.

Trend 1: Energy Efficiency in Electric Vehicles

Technological breakthroughs will reduce the energy consumption of "New Energy Vehicles" (NEVs)—which primarily include electric, hybrid, and fuel cell vehicles in China—to below 10 kWh per 100 kilometers (approx. 62 miles) in the A-class by 2025, according to China-SAE and Zhongguo Qichebao.

 Similar to internal combustion engine vehicles, NEVs are trending toward energy-efficient driving. Consumer demand for greater range and faster charging is accelerating the search for techniques enabling economical driving, such as lightweight body components, improved thermal management, and advanced integration of electrical and electronic control systems.

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Trend 2: Faster In-Vehicle Computing Power Growth

"In-vehicle computing platforms" have reached 500 TOPS (trillions of operations per second), but data-intensive applications like end-to-end (E2E) models for assistance systems are driving the need for even more computational power.

While "in-vehicle computing platforms" have already reached a performance level of 500 TOPS (trillions or tera operations per second), the demand for computational power continues to grow due to data-intensive applications like "end-to-end" (E2E) models for assistance systems.

 The computers installed in vehicles are becoming more powerful thanks to platforms optimized for digital intelligence, featuring integrated, multiple SoCs. These platforms simplify the parallel processing of large volumes of diverse data streams, further enhanced by increasingly advanced automotive chips.

 The priority for engineers in China is to optimize the collaboration between hardware and software. This ensures better utilization of existing computational power, reduces energy consumption, and improves system stability.

 Enhanced computing power stems from digitally optimized platforms with multiple integrated system-on-chips (SoCs), enabling efficient parallel processing of diverse data streams. Improved collaboration between hardware and software will further optimize computing efficiency, reduce energy consumption, and enhance system stability.

Trend 3: Smarter Chassis Systems

Increasingly digital chassis systems, such as "BYD DiSus" or competing models like Geely's "AI Digital Chassis" or SAIC IM Motors' "Lingxi Digital," already signal the trend. By 2025, the convergence of intelligent driving and the "smart chassis" designed to support it will be in full swing.

 The key here is integration—between sensors, actuators, and other chassis control components. This enables faster and safer implementation of automated driving functions, including environmental perception, decision-making, and executing commands generated within the vehicle.

Additionally, other system-critical areas are being reimagined through the ongoing digitalization of the chassis, including x-by-wire technologies. For example, "steer-by-wire" eliminates the need for any mechanical connection between the steering wheel or joystick and the axles.

Trend 4: Transition to Full-Domain Operating Systems

The trend in 2025 is clearly moving toward further centralized computing power within vehicles. Operating systems, which are still often specialized for individual domains, are merging and creating more complex, service-oriented architectures that manage the entire vehicle.

 Manufacturers in China, such as Xpeng and Li Auto, along with suppliers like ZTE, have already integrated their software components across various domains, such as cockpit systems and intelligent driving, by 2024 (keyword: "cross-domain"). In 2025, this trend toward vehicle-wide "full-domain" operating systems will intensify, with early products from companies like Huawei and Nio leading the way.

Trend 5: Synthetic Data for Algorithm Training

The demand for high-quality training data for improved lane-changing or parking assistants and "Urban NOA" autopilots is growing exponentially. Fortunately, artificial intelligence, particularly generative AI, offers a solution that increasingly makes analyzing real-world driving data unnecessary or, at the very least, effectively complements it.

 Using AI, texts, images, and videos can be processed more quickly and analyzed for information about different types of road users and their interactions. The time-consuming task of data labeling is automated, allowing automated driving systems at various levels to continuously learn independently.

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Trend 6: Smarter Hybrid Powertrains

With the unrelenting popularity of plug-in hybrids and E-Revs (range extenders) in China, there has been a significant surge in innovation, particularly in motor control. This progress is making dual powertrains more efficient and environmentally friendly.

 Examples already available on the Chinese market include BYD's fifth-generation DM platform with its vehicle-wide thermal management system and Changan Auto's new "Blue Whale 3.0" system, where the PDCU domain controller optimizes energy consumption.

Trend 7: Electronic Mechanical Braking (EMB)

Hydraulics are a thing of the past. EMB, or "Electronic Mechanical Braking," is simpler, more compact, and promises shorter response times and improved lane stability during braking. It is also a prerequisite for highly automated vehicles.

 Bosch, ZF, and Continental are highly active in this field and are gradually expanding their mass production of EMB systems in China. Beijing West Industries (BWI) plans to establish a complete production line for EMB this year, with serial production set to begin in 2026. OEMs such as BYD, Li Auto, and Great Wall Motor are intensifying their research and development efforts in the area of electronic braking.

Trend 8: Large Language Models and Edge Architectures

LLMs (Large Language Models) are one of the hottest trends in the Chinese automotive industry. The focus is shifting strongly toward "end-to-end" (E2E) systems. In this approach, perception, decision-making, and control increasingly occur within the vehicle itself, with decisions becoming, according to proponents of this technological route, increasingly "human-like."

 Xpeng Motors, Volkswagen's new partner in China, has developed the first production-ready product with its E2E model "AI Tianji 5.4.0." BYD has also announced its own E2E architecture, aptly named "Eye of God."

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Trend 9: Enhanced Battery Cell Monitoring

While the condition of the numerous cells in a battery was previously only assessed superficially or in aggregate, they are now being equipped with thin sensors, fiber optic cables, and electrodes. These provide detailed insights into internal temperature, gas concentration, air pressure, and electrical currents within the cells.

 Improved monitoring enables "self-healing techniques" that can intervene to correct issues in cases of overheating or impending short circuits. Following several high-profile electric vehicle fires in Asia, the industry is more than receptive to such innovations.

Trend 10: Risk Control for Autonomous Driving

After the initial fascination with what autonomous vehicles can do, the focus is gradually shifting to what they must not do. A series of widely publicized accidents has also led to growing awareness in China that "systematic safety issues" must be resolved before "operational safety issues" can be studied and improved on the road.

 Manufacturers like FAW, BYD, and Changan, along with research institutes at Tsinghua University and the Beijing University of Aeronautics and Astronautics, are working to develop holistic safety and risk management concepts. These are intended to prevent accidents before drivers in China are allowed to take their hands off the wheel.

 These trends underline the transformative journey of China's automotive industry as it embraces cutting-edge technologies to shape its future.

*Henrik Bork, is General Manager and Founder of AsiaWaypoint, Beijing, P.R. China