Under the combined influences of the dual carbon agenda, the transition to new energy, and the evolution of global trade, China's medium and heavy truck sector, which has long been dominated by diesel engines, is currently undergoing profound changes. From policy-driven upgrades to emission standards, to organically expanding export footprints, and from technological iteration in traditional fuel vehicles to the commercialization of new energytrucks, the market has reached a critical "gear shifting" moment.

This Mobility Paper will cover:

• Medium and heavy truck sales volumes
• Viable pathways to balance policy incentives with market pressures
• Production fluctuations: domestic vs overseas demand
• New energy transition guided by policy and accelerated by market forces
• Powertrain evolution- from conventional to new energy technologies
• Overseas markets are redefining competitive dynamics
• Trend spotlight: a competitive landscape with emerging market shifts
• Trend spotlight: why Mexico's export upswing will not be sustainable
  
  

Key Takeaways

⦁A combination of weak property market, low confidence among consumers and private enterprises, and the design of government support policies has limited the strength of China's economic recovery. In this environment, any meaningful improvement in domestic medium and heavy truck sales will depend on the emergence of new policy or regulatory measures capable of lifting demand in the short term.
⦁ In 2025, the expanded "truck scrappage and replacement program" will support sales directly, also broader government stimulus, and stronger demand for battery electric trucks will impact sales volumes. S&P Global Mobility expects full year sales to reach about 1.14 million units, an increase of ten percent from 2024.
⦁ Over the next years, excess freight capacity, a subdued property sector, slower economic growth, and the continued shift of bulk commodities from road to rail will limit the potential for strong domestic demand. In the absence of major new policy catalysts, product replacement will remain the dominant source of demand, and the market will enter a period of slow growth.
⦁ Despite short term pressures from slower economic growth, trade tensions, and elevated inventories, production will continue to recover, supported by the accelerated retirement of older trucks and stable export demand. S&P Global Mobility forecasts production of about 1.15 million units in 2025, up around sixteen percent year on year, and projects a cyclical peak of 1.22 million units in 2028.
⦁ Heavy trucks, particularly heavy tractor units, will maintain a dominant position due to long distance transportation requirements. Medium duty trucks will grow at a faster pace, supported by stricter enforcement of overloading regulations, road access policies that favour medium sized enclosed trucks, and rising demand from e-commerce and regional distribution centres.
⦁ New energy trucks will be the fastest growing segment under the combined influence of policy support and commercial demand. The expansion of long-range product offerings will accelerate adoption in medium and long-haul transport. Competition between charging and battery swapping technologies will remain a key factor shaping the evolution of the market.
⦁ Southeast Asia, Africa, and the Middle East remain the main export markets for Chinese medium and heavy trucks. Chinese manufacturers will expand their localisation efforts in these regions to strengthen market presence. Exports to Russia and Mexico will face constraints due to geopolitical pressures and trade-related uncertainties.
⦁ Diesel powered medium and heavy trucks will remain the largest segment but will continue to lose share as new energy models expand, with their share of demand projected to fall to about fifty three percent by 2032. Battery electric trucks will become the main source of growth, reaching a twenty four percent share by 2032 and achieving scale in industries such as steel and cement. Fuel cell trucks will require more progress in technology and refuelling infrastructure and are likely to serve specialised applications over the longer term. Demand for natural gas trucks will remain stable during the transition period and gradually this will make way for cleaner energy pathways.

Contributing Editors

• Jia Li, Principal Analyst, Medium and Heavy Commercial Vehicle Forecasts, S&P Global Mobility
• Cassie Liu, Principal Analyst, Medium and Heavy Commercial Vehicle Forecasts, S&P Global Mobility
• Min Ji, Senior Analyst, Medium and Heavy Commercial Vehicle Forecasts, S&P Global Mobility