Zhejiang Challenges Anhui for China’s NEV Crown in Heated Provincial Race
The race to become China’s leading province for new energy vehicle (NEV) production has entered a new and more intense phase, with Zhejiang emerging as a serious challenger to reigning champion Anhui. The lead has changed hands multiple times in 2026, reflecting the breakneck pace of competition in the world’s largest EV market.
According to the latest data from China’s National Bureau of Statistics released on June 22, Anhui reclaimed the top spot with 685,300 units produced through May, narrowly edging out Zhejiang’s 670,700 units. The back-and-forth battle follows Zhejiang’s brief ascendancy in March and April, when it ranked first nationally for two consecutive months — a milestone for a province that had languished in sixth or seventh place as recently as 2024.
A V-Shaped Reversal
Zhejiang’s resurgence represents a remarkable turnaround. The province was an early NEV pioneer, with its production accounting for roughly one-fifth of the national total in 2015. But a string of failed projects caused it to lose ground, and by 2024 its share had fallen below 10 percent, as 36Kr reported.
The turning point came in 2023, when Zhejiang issued an “Action Plan for Accelerating the Development of the New Energy Vehicle Industry,” setting a target of 1.2 million annual units by 2025 — a goal it ultimately achieved. By the end of 2025, Zhejiang had climbed to third place nationally with 1.3822 million units, behind Anhui (1.7941 million) and Jiangsu (1.5748 million).
The Dual-Engine Strategy
Zhejiang’s rise is powered by what analysts call a “dual-wheel drive”: Geely Auto, a traditional automaker that has aggressively pivoted to new energy, and Leapmotor, a fast-growing EV startup.
Geely sold 784,000 NEVs in the first five months of 2026, a 9.5 percent year-on-year increase, capturing 13.5 percent of the national market — second only to BYD, according to CnEVPost. The company’s exports surged 183.65 percent year-on-year in May alone, with overseas business described as a “second growth curve.”
Leapmotor, meanwhile, delivered 263,000 units in the January-May period, up 51.5 percent year-on-year and 100,000 units ahead of its nearest rival among China’s new EV makers. The company set a new monthly record in May with 81,569 deliveries, as CnEVPost reported.
Song Ting, director of the Industrial Policy Research Institute at the Zhejiang Provincial Institute of Industry and Information Technology, noted that all of Leapmotor’s production capacity is concentrated in Zhejiang, while the growth rate of Geely’s Zhejiang base far exceeds that of its national group.
Zhang Xiang, an automotive industry analyst at North China University of Technology, identified Leapmotor as “the key variable for Zhejiang to challenge Anhui,” pointing to its strategy of offering high-configuration vehicles at competitive prices, enabled by Zhejiang’s robust supply chain ecosystem.
The Profitability Challenge
Despite the impressive production numbers, both provinces face a common bottleneck: low profit margins. Chery, the Anhui-based automaker, reported an NEV gross margin of just 8.8 percent in its 2025 annual report.
Zeng Gang, dean of the Urban Development Research Institute at East China Normal University, told local media that during a recent field investigation, a major Yangtze River Delta automaker complained that “with such a low gross profit margin for new energy vehicles, it is inevitable to suffer losses in the domestic market competition when there are any slight changes.”
The pressure extends beyond automakers to the supply chain. As a major auto parts manufacturing hub, Zhejiang’s suppliers are feeling the pinch from OEM price wars, local media has reported.
From Scale to Value
The competition is quietly shifting from raw production volume to a more sophisticated contest centered on profitability, technology, and brand strength. As NIO CEO Li Bin recently observed, China’s automotive industry has moved from “single-point competition” to “system-based competition.”
Both provinces are pivoting toward the next frontier: intelligent driving. During the 15th Five-Year Plan period (2026-2030), Zhejiang has proposed building a national-leading core industrial cluster focused on areas like autonomous driving. Anhui has listed L3-level intelligent connected vehicle pilots as a key priority for 2026.
Zeng Gang emphasized that China’s NEV industry is “gradually transitioning from the primary stage of cost-competition to the stage of technology-competition, and there is still a long way to go to achieve the ultimate goal of value-creation and brand-building.”
The Export Dimension
Overseas markets are emerging as a critical growth engine. Zhejiang’s NEV exports reached 31.3 billion yuan in the first five months of 2026, up 91.8 percent year-on-year. Anhui exported 800,000 vehicles during the same period, ranking first nationally with a 116.9 percent increase.
Leapmotor has achieved a remarkable 33.5 percent market share in Italy’s battery electric vehicle market, while Geely’s first-quarter NEV exports surged 572 percent year-on-year, helping lift the company’s gross margin from 15.7 percent to 17.5 percent.
However, risks loom. The Xinhua News Agency reported in March that Chinese authorities are planning to strengthen price monitoring and cost investigations to regulate competition in the NEV industry. Meanwhile, EU tariffs and the US Inflation Reduction Act are creating trade barriers that threaten export-dependent growth strategies.
What to Watch
The question of which province will ultimately claim the “NEV first province” title for 2026 remains wide open. But as the competition intensifies, the more consequential battle is unfolding around profitability, technological sophistication, and global expansion. The outcome will have significant implications for China’s automotive industrial policy, supply chain geography, and competitiveness in the global electric vehicle era.