2025 Automotive Power Dynamics: A Clash of BEV, PHEV, and EREV in the Market

The global automotive industry is undergoing a significant power revolution, with the diversification of powertrains becoming a central feature of industry development. Driven by carbon neutrality goals, countries are rapidly advancing the green transformation of the automotive sector. This convergence of technological innovation and market demand has spurred the robust development of various technological routes, including Battery Electric Vehicles (BEV), Plug-in Hybrid Electric Vehicles (PHEV), and Extended Range Electric Vehicles (EREV).

This diversified landscape not only showcases technological inclusiveness but also reflects the varied demands for powertrains across different regions and consumer groups. From Europe’s preference for hybrid models to the Asia-Pacific emerging markets’ enthusiasm for efficient electrification, a competitive scenario of “a hundred flowers blooming” is emerging in the global automotive power systems.

As the largest market for new energy vehicles (NEV), China will continue to lead this transformation wave over the next decade. By 2024, China’s production and sales of NEVs have already exceeded ten million units, with a market penetration rate reaching 40.3%. Sales are expected to reach 16.5 million units by 2025, with a penetration rate surpassing 55%.

With dual drivers of policy support and technological breakthroughs, the Chinese NEV industry is transitioning from a “policy dividend period” to a “technology universalization period,” leading to significant changes in market demand structure. The core driver is the demand for replacement and upgrade, with growth in lower-tier markets reaching as high as 61%. Prices are concentrating around the mainstream range of 100,000 to 150,000 yuan, and technological innovation is shifting from “configuring components” to “enhancing experience.”

In this process, the three major power technology routes exhibit clear market positioning and development logic:

• BEV (Battery Electric Vehicle): With zero emissions, high efficiency, and favorable policies, BEVs are gradually establishing themselves as the mainstay of NEV development. By the first quarter of 2025, global BEV sales reached 2.67 million units, a year-on-year increase of 45%. China’s charging infrastructure has surpassed 13.749 million units, with the number of public charging stations exceeding twice that of gas stations, and highway service area coverage reaching 98%, effectively resolving the “range anxiety” issue.
• PHEV (Plug-in Hybrid Electric Vehicle): PHEVs are accurately positioned in the mid-to-low-end market, quickly rising due to their unique advantage of “no charging dependency + fuel backup.” In the first quarter of 2025, global PHEV sales reached 1.35 million units, a year-on-year increase of 28%. Their core competitive edge lies in optimized battery capacity and power system design, maintaining pure electric range within 100-200 kilometers to meet daily commuting needs while alleviating long-distance travel anxiety through the fuel engine. Additionally, PHEV prices are 15%-20% lower than BEVs, aligning with the consumption characteristics of lower-tier markets.
• EREV (Extended Range Electric Vehicle): Focusing on the mid-to-high-end market, EREVs reconstruct user experience through “pure electric drive + range-extending energy.” Brands like Li Auto and AITO have achieved pure electric ranges exceeding 200 kilometers and comprehensive ranges of over 1,000 kilometers by equipping high-efficiency motors of 200 kW or more and intelligent energy management systems. Standard configurations include Level 2 combined driving assistance and voice interaction, precisely catering to middle-class families’ demands for technology and comfort.

It is noteworthy that this diversified power landscape is accelerating the global expansion of China’s automotive industry. In 2023, China exported 1.203 million NEVs, a year-on-year increase of 77.2%, cultivating user habits in the EU market through hybrid models while capturing market share in Southeast Asia with cost-effective BEVs, forming a dual-drive model of “technology export + localized production.” Meanwhile, explorations of alternative energies such as methanol, ammonia, and hydrogen in the commercial vehicle sector (e.g., methanol heavy trucks and hydrogen fuel cell cold chain vehicles) are adding new dimensions to global automotive power diversification.

This ongoing power transformation, driven by technological innovation and market selection, is not only reshaping the competitive rules of the automotive industry but also heralding the arrival of a new era characterized by “coexistence of multiple technology routes, covering all scenario demands.” Over the next decade, with breakthroughs in battery technology, upgrades in intelligent experiences, and the enhancement of global infrastructure, diversified powertrains will continue to propel the automotive industry towards the ultimate goals of efficiency, low carbon emissions, and intelligence.

1. Multiple Power Modes Driving the Development of the New Energy Vehicle Industry

1.1 Trends in Powertrain Development

In the evolution of the global automotive industry, the diversification of powertrains has become an inevitable trend. This trend reflects technological iteration, changes in market demand, as well as heightened environmental awareness and energy structure transformation. From traditional internal combustion engines to hybrids (including plug-in and extended range), pure electric (BEV), and fuel cell vehicles (FCV), multiple power systems are developing in parallel: on one hand providing consumers with personalized choices, and on the other, challenging technological research and development, cost control, and infrastructure support.

This report focuses on BEV, PHEV, and EREV, analyzing their technological advancements, trends, and future pathways through data and market insights.

1.2 Current Status of China’s New Energy Vehicle Industry

The Chinese market is expected to see rapid growth over the next decade, with BEVs at its core. Although PHEVs and EREVs are experiencing short-term growth, their market shares are projected to decline during the forecast period. By 2025, the penetration rate of new energy passenger vehicles is expected to exceed 50%, leading to a price war and industry consolidation phase. The oversupply of new energy models, decreasing battery material prices, and the acceleration of the elimination of tail-end enterprises are contributing to this trend.

In 2024, several emerging brands have already faced challenges, and it is anticipated that this consolidation trend will continue into 2025. Under the rapid increase of new energy vehicles, mainstream joint venture OEMs have not reached the competitive capability in new energy products as they have in traditional fuel fields, resulting in an overall decline in sales. Domestic manufacturers, including emerging brands, are rapidly increasing their market share, leading to a swift replacement of traditional fuel vehicles.

1.3 Consumer Demand and Trends in Intelligent Technology

As consumers choose vehicles with different powertrains, they consider various factors such as fuel economy, environmental awareness, range and refueling convenience, performance requirements, price factors, and policy support. BEVs are favored by environmentally conscious consumers seeking technological appeal due to their zero-emission characteristics. PHEVs offer a balance of electric experience and fuel convenience, making them suitable for budget-conscious consumers in areas with underdeveloped charging infrastructures. EREVs focus on the mid-to-high-end market, alleviating range anxiety with their range-extending capabilities while satisfying demands for technology and comfort.

In the future, the proliferation of technologies such as fast charging and solid-state batteries will further refine consumer demands, driving personalized choices. The core competitiveness of new energy vehicles inherently aligns with the integration of electrification and intelligence, reshaping user perceptions through intelligent configurations.