Amid the global automotive industry’s full-scale shift toward electrification, internal combustion engines (ICE) have long been labeled outdated and obsolete. The industry widely believes that new energy vehicles will soon replace traditional fuel-powered models, rendering further technical iteration of gasoline engines unnecessary. For decades, ICE and core hybrid technologies have served as the moat of Japanese automakers’ global dominance. Japanese brands have long led the world in thermal efficiency, reliability, and hybrid calibration, building an unshakable technical barrier.
While most global carmakers have flocked to pure electric vehicle development and neglected ICE upgrades, leading Chinese independent brands including Chery, Geely, and Changan have adhered to a dual-track strategy and quietly advanced traditional powertrain technology, achieving disruptive breakthroughs in core fields. Recently, Nikkei Asia published an article acknowledging that Chinese automakers are rapidly catching up with their Japanese rivals in engine thermal efficiency, power conversion efficiency, and intelligent calibration — marking the end of Japan’s decades-long technological monopoly in powertrain systems.
Leading the Hybrid Track: Domestic Engines Achieve World-Class Thermal Efficiency
Thermal efficiency is the core benchmark for evaluating powertrain technical strength. Traditional gasoline engines generally deliver a thermal efficiency below 40%, and even top-tier hybrid engines from Japanese manufacturers are considered industry-leading once they exceed this threshold. Through years of independent research and accumulation, Chinese automakers have focused on dedicated hybrid engines, repeatedly setting new global thermal efficiency records and directly challenging Japan’s traditional technological stronghold.
Chery stands out with its latest Kunpeng Tianqing hybrid system. Boasting a record-high thermal efficiency of48.57%, the powertrain debuted on the all-new Tiggo 9 at the Shenzhen Auto Show and became a major highlight. Ultra-high thermal efficiency means superior fuel energy conversion. It significantly reduces fuel consumption and emissions, boosts hybrid driving range and power performance without relying on larger battery packs, and is fully compatible with plug-in hybrid and extended-range electric vehicle architectures, delivering outstanding compatibility and practicality.
Geely has also made remarkable progress with its i-HEV hybrid engine, achieving a thermal efficiency of 48.41% and being widely equipped on mainstream models such as the Xingyue L. The engine integrates multiple hardware upgrades, including a 15.5:1 ultra-high compression ratio, optimized combustion design, reduced internal friction, Miller cycle valve timing, and ultra-high-pressure fuel injection, laying a solid foundation for high-efficiency power output. Its most innovative advantage lies in intelligent optimization. Equipped with an intelligent hybrid management system, the vehicle dynamically adjusts power output by collecting real-time data on altitude, humidity, and temperature to maximize efficiency in all driving scenarios. Geely’s senior executives stated bluntly that the brand will fundamentally disrupt Japan’s traditional hybrid technology system.
Changan Automaker has achieved a world-first mass-production breakthrough in high-pressure fuel injection technology. Its new Blue Whale Ultra Hybrid engine features a 500bar ultra-high-pressure fuel injection system, the first of its kind in mass production globally. Compared with the mainstream 200bar direct injection systems in the industry, the upgraded pressure enables finer fuel atomization and more sufficient combustion, further improving thermal efficiency while enhancing acceleration performance, filling the key hardware gap in domestic powertrain technology.
Dual-Track Strategy: Internal Combustion Engines Remain a Core Foundation
It is noteworthy that the new generation of engines launched by Chery, Geely, and Changan are all dedicated HEV hybrid powertrains. Amid soaring new energy penetration, Chinese automakers’ continuous investment in hybrid ICE technology is not a retrograde step for fuel vehicles, but a precise response to global transitional market demands. Globally, over 70 million consumers still choose fuel and hybrid vehicles every year. In most overseas markets, the phase-out of fuel vehicles is progressing slowly, and hybrid models remain mainstream thanks to their low fuel consumption, high reliability, and range anxiety-free advantages.
For Chinese automakers, ICE and hybrid technologies constitute an indispensable core business foundation. Chery, for example, sold 2.8 million vehicles last year, 70% of which were fuel-powered models. With 1.34 million exported vehicles, it ranked first among Chinese auto exporters, outperforming BYD and Geely and becoming a core player in China’s overseas auto expansion.
The global automotive market shows clear structural differences: Chinese automakers capture 59% of the global new energy vehicle market, leading the global electrification transition, while Japanese brands hold a 30% share of the non-electric vehicle market, surpassing China’s 20%. According to GlobalData forecasts, global pure fuel vehicle sales will drop by 36% by 2038, while hybrid vehicles will maintain a stable 15% market share. This means that mastery of hybrid engine technology will be a decisive competitive advantage for automakers in the coming decades.
GF Securities analysis points out that Chinese automakers’ unique technical route of high-efficiency hardware + intelligent calibration differs from Japan’s traditional fixed-logic hybrid solutions, reshaping the technical rules and competitive landscape of the global hybrid market.
Full-Scale Industrial Reversal: Chinese Automakers Overtake Japanese Rivals Across the Board
Breakthroughs in powertrain technology are only a microcosm of the rise of China’s automotive industry. 2025 marks a watershed for the global automotive pattern. Chinese automakers achieved global sales of 27 million units, surpassing Japan’s 25 million units to rank first worldwide, ending Japan’s 25-year reign as the global sales champion.
Global automotive rankings have been completely restructured. BYD overtook Ford to secure sixth place globally, while Geely surpassed Honda to rank eighth. Chinese brands including Chery, Changan, SAIC Motor, and Great Wall now occupy six spots in the global top 20 vehicle sales list, outnumbering Japan’s five entries. Meanwhile, BYD has overtaken Tesla as the world’s top-selling pure electric vehicle brand, achieving dual leadership in both fuel and new energy sectors.
Empowered by superior technology, cost efficiency, and rapid R&D cycles, Chinese automakers are accelerating global expansion and breaking Japan’s long-term market monopoly in traditional strongholds such as right-hand-drive markets across Southeast Asia and Oceania. Chinese premium new energy vehicles are winning over consumers with high-end configurations including air suspension and massaging seats, as well as advanced intelligent cockpit and battery-electric systems.
Hong Kong’s market shift is a typical example. For decades, Japanese vehicles have dominated Hong Kong’s roads, with Toyota Crowns serving as mainstream taxis and Toyota Alphards as the preferred luxury business vehicles. However, in the first four months of this year, electric vehicles accounted for over 80% of newly registered private cars in Hong Kong, with Chinese brands including BYD, GAC, Zeekr, and Denza outselling Japanese competitors by a wide margin.
Data from the China Passenger Car Association (CPCA) further validates this trend. In the first four months of the year, Toyota’s market share fell by 1.4% in Southeast Asia and 4.1% in Oceania. In contrast, Chery’s market share in Southeast Asia rose by 1.7%, and BYD’s Oceania market share increased by 2.5%, reflecting the steady collapse of Japanese automakers’ overseas market barriers amid rapid Chinese brand growth.
Conclusion: Rewriting the Final Chapter of the Global Powertrain Industry
Different from Japanese automakers’ hardware-centric, low-intelligence traditional hybrid routes, Chinese brands have forged a dual development path of leading electrification and upgrading fuel technology. While consolidating global advantages in new energy vehicles, they have leveraged intelligence to iterate traditional powertrain systems, closing the last technical gap in China’s automotive industry.
Internal combustion engines will not disappear anytime soon, even if they no longer dominate the mainstream market. During the long transition period of global automotive electrification, Chinese automakers have secured core discourse power in the global powertrain industry and completely broken Japan’s decades-long technical monopoly. From sales catch-up and technological benchmarking to all-round leadership, China’s automotive industry has achieved comprehensive transformation, ushering in a new era of Chinese dominance in the global automotive landscape.
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