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Introduction

It was only a matter of time.

In recent years, the automotive sector has dismissed engines as relics of the past. Particularly with the ascent of new energy vehicles, many believed that internal combustion engines (ICEs) would fade into history. However, while the global focus remains on electrification, several Chinese automakers have been quietly refining traditional internal combustion engines.

Indeed, when it comes to internal combustion engines, traditional foreign automakers have long held the upper hand. And when discussing engine technology, Japanese automakers, renowned for their global dominance—especially in hybrid technology—come to mind. Yet, this landscape is gradually shifting.

On June 17, Nikkei published an article titled "Chinese Automakers Rapidly Catch Up to Japanese Rivals in Engine Technology, Power Conversion Efficiency, and AI Utilization." The piece highlights a series of recent breakthroughs by Chinese automotive brands in terms of efficiency, performance, and cost reduction.

In essence, Japanese media now acknowledge that Chinese automakers are swiftly surpassing their Japanese counterparts in engine technology. This significant leap forward is attributed to rapid intelligence-driven development. After being reposted by multiple foreign media outlets, there is a belief that Japanese automakers' technological leadership in engines is facing a severe crisis.

01 Merging Technology with Intelligence

Many may recall that a few years ago, when traditional fuel vehicles were still in high demand, several Chinese automakers achieved notable success in engine thermal efficiency. Companies like Chery, Geely, and Dongfeng unveiled hybrid engines with thermal efficiencies exceeding 48%, directly challenging Japanese automakers in their technological stronghold.

The Japanese media article also spotlights the latest engines from Chery, Geely, and Changan, particularly their HEV hybrid engines released this year, offering a comprehensive analysis of their significance.

For instance, at this month’s Shenzhen Auto Show, Chery’s new Tiggo 9, equipped with the "Kunpeng Tianqing" hybrid system, stole the spotlight. According to Chery’s April announcement, the engine achieves a thermal efficiency of 48.57%, with Vice President Hong Gaoming dubbing it "the world’s most thermally efficient engine."

Foreign media argue that while high horsepower figures are appealing, efficiency is paramount. Thermal efficiency measures how much fuel energy is converted into usable power rather than being wasted as heat. Traditional gasoline engines typically fall short in this regard, with even modern, efficient hybrids exceeding 40% thermal efficiency considered exceptional.

More efficient engines reduce fuel consumption and emissions while increasing range and enhancing hybrid performance without the need for larger battery packs. Chery also stated that Kunpeng Tianqing technology will be applied to plug-in hybrid and extended-range electric vehicles.

Geely is not far behind, with its "i-HEV" hybrid engine achieving a thermal efficiency of 48.41%, already installed in the Xingyue L model. According to disclosed details, the engine features a 15.5:1 high compression ratio, advanced combustion design, reduced internal friction, Miller cycle valve timing, and ultra-high-pressure fuel injection.

These enhancements, combined with Geely’s new intelligent hybrid management system, reportedly utilize real-time data such as altitude, humidity, and temperature to optimize efficiency while driving. In essence, this engine is superior because it is smarter. Geely CEO Gan Jiayue bluntly stated at the April launch: "We will fundamentally overturn Japan’s existing hybrid technology."

Changan Automobile achieved mass-production breakthroughs in fuel injection technology, with its May-launched "Blue Whale Super Engine Hybrid" featuring a 500bar high-pressure fuel injection system, reportedly the first globally mass-produced at this pressure level. Existing direct injection systems typically max out around 200bar, with higher pressure enabling finer atomization, boosting thermal efficiency and acceleration performance.

It is evident that these three engines are strictly designed for HEV hybrids. The purpose of hybridization is to replace and upgrade internal combustion engines. Globally, despite China’s soaring new energy penetration, over 70 million consumers still opt for traditional fuel vehicles annually.

Thus, even amid the new energy wave, internal combustion engines remain an irreplaceable foundation for Chinese brands. Last year, Chery sold 2.8 million vehicles, exporting 1.34 million, surpassing BYD and Geely to become China’s largest automotive exporter. However, gasoline-powered vehicles still account for 70% of Chery’s total sales.

Japanese automakers have traditionally led in engine technology, while Chinese competitors offset weaknesses by focusing on electrification. According to MarkLines, Chinese companies captured 59% of the global electric vehicle market last year, compared to Japan’s 3%. However, in non-electric markets, Japan holds 30%, surpassing China’s 20%.

GlobalData predicts that by 2038, pure fuel vehicle sales will decline by 36%, but hybrid market share will stabilize at 15%. This means that whoever secures the technological high ground in hybrid engines will dominate this transitional market. GF Securities analysis suggests that Chinese automakers are reshaping the global hybrid market landscape through an "efficient engine + intelligence" strategy.

02 From Catching Up to Leading

This round of technological breakthroughs comes as Chinese automakers simultaneously compete in both electrification and traditional fuel vehicle markets. While aggressively promoting electric vehicles overseas, they are quietly refining internal combustion engine technology to meet market demand from consumers not yet ready to abandon ICEs.

This dual-track strategy, coupled with R&D capabilities unmatched by foreign manufacturers, makes the current landscape truly significant. Internal combustion engines may not make a comeback, but they are far from obsolete. China is merely ensuring it can help write the final chapter of the ICE era.

Of course, broader attention focuses on China’s comprehensive surpassing of Japanese automakers in sales, technology, and regional presence. For instance, by 2025, Chinese automakers are projected to sell approximately 27 million vehicles globally, surpassing Japan’s 25 million to claim the top spot—the first time Japanese automakers have relinquished the sales crown since 2000.

This shift in power dynamics is clearly reflected in individual company rankings. BYD overtook Ford to rank sixth globally in 2025. Meanwhile, Geely achieved a similar breakthrough, surpassing Honda to rank eighth in the global automotive market.

China’s aggressive global expansion is unstoppable, with six Chinese automakers now among the world’s top 20. These include major brands like Chery, Changan Automobile, SAIC Motor, and Great Wall Motor, outnumbering Japanese automakers, who now have only five representatives in the global top 20 by sales.

Meanwhile, Chinese automakers dominate not only traditional vehicle markets but also the new energy sector, where BYD has officially surpassed Tesla to become the world’s top-selling pure electric vehicle brand. Factors driving this realignment include China’s strong advantages in advanced technology, cost-effectiveness, and extremely rapid R&D cycles.

Today, Chinese automakers are accelerating their entry into right-hand-drive markets from Australia to Southeast Asia, challenging long-dominant Japanese companies with premium electric vehicles targeting affluent consumers.

Executives note that in right-hand-drive markets, particularly Australia, Southeast Asia, and Hong Kong, electric vehicle penetration is already relatively high. Price is not the primary factor attracting consumers to Chinese brands; these buyers also value features like air suspension and seat massage.

Chinese automakers’ recent participation in Hong Kong auto shows exemplifies this trend. For decades, Japanese vehicles dominated Hong Kong streets, with the Toyota Crown Comfort as the mainstay taxi model and the Toyota Alphard as the top choice for celebrities and the wealthy. However, according to Hong Kong Transport Department statistics, electric vehicles accounted for over 80% of newly registered private cars in the first four months of this year, with Chinese brands like BYD, GAC, Zeekr, and Denza rapidly rising above Japanese rivals.

CPCA data shows that in the first four months of this year, Toyota’s market share in Southeast Asia declined by 1.4%, and by 4.1% in Oceania. Meanwhile, Chinese automakers gained ground, with Chery’s Southeast Asian market share increasing by 1.7% and BYD’s Oceanian share growing by 2.5%.

Just as Japanese automakers entered global markets in the 1980s and 1990s, Chinese companies are now seeking to enhance competitiveness by shifting from exporting domestically produced vehicles to establishing localized production overseas.

Editor-in-Chief: Du Yuxin Editor: He Zengrong

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