Gasgoo Munich- Joint-venture electric vehicles have entered a distinct new cycle of improvement.
Data compiled by Gasgoo Automotive Research Institute shows that between January and July 2026, the penetration rate for joint-venture new-energy vehicles climbed from 16.5% to 25.1%. Across the JV market, the powertrain landscape is shifting: pure-electric models are taking the lead, multiple technologies are advancing in parallel, and internal combustion engines are rapidly retreating.
Running parallel to that rising penetration is a deepening localization shift among joint-venture automakers. Numerous domestic tech firms have evolved from mere local substitutes into the preferred—even sole—suppliers for these JVs.
At the brand level, this improvement has already translated into tangible sales growth for some players. In the first seven months of this year, GAC Toyota's new-energy vehicle sales surged 124% year-on-year, while Dongfeng Nissan jumped 122% and Changan Mazda climbed 87%. Buick posted a 70% gain, and Audi's new-energy division defied the trend with a 208% surge, fueled by the buzz around new models from SAIC Audi.
These brands share a common trait: their new-energy vehicle products are increasingly built on Chinese platforms and supply chains. In terms of intelligence and pricing, they are actively aligning themselves with the competitive standards of the Chinese market.
Of course, improvement doesn't mean a full-blown turnaround.
Currently, market growth for joint-venture EVs is heavily concentrated in a handful of brands and models that have completed localized restructuring. Many other joint-venture brands remain stuck in a product gap or are lagging in their transformation pace.
A more precise assessment is that joint-venture EVs are entering a recovery channel. The core driver of this upswing isn't simply importing global models—it's a reshuffling of Chinese supply chains, partners, and market demands that follows the shift from global adaptation to "made-for-China" customization.
Image source: AI + Gasgoo Auto
The Localization Shift in Joint-Venture EVs
Joint-venture automakers are undergoing a critical shift from quantitative to qualitative change in their localization strategies.
In the early joint-venture model, foreign partners provided vehicle platforms and technical standards while Chinese counterparts handled manufacturing and distribution. Chinese suppliers were largely confined to procuring parts, often serving as substitutes for imported components.
Now, as the transition to electrification accelerates, joint-venture brands and China's world-leading new-energy supply chain have moved into a new phase of deep collaboration on core components.
Take Toyota: its bZ series consists of nearly 90% Chinese components. The BoZhi 7 adopts a full-stack Chinese solution directly, integrating Huawei's electric drive system, HarmonyOS cockpit, and Momenta's autonomous driving technology.
Volkswagen's approach is equally noteworthy. By investing in Gotion High-Tech to secure battery supply, partnering with XPENG on electronic and electrical architecture, and teaming up with Horizon Robotics on intelligent driving systems, Volkswagen has built a dual-layer cooperation system of "capital plus technology" in China. Their first co-developed model with XPENG, the Zhong 08, features XPENG's VLA end-to-end large driving model, Turing chip, and 800V platform architecture. Volkswagen handles vehicle integration and chassis tuning, bringing its development speed closer to Chinese brands—a fundamental breakthrough compared to traditional joint-venture cycles.
Image source: Volkswagen
The role of Chinese suppliers is also undergoing a fundamental shift. Companies like CATL, Momenta, and Huawei have become the preferred suppliers for numerous joint-venture models.
Yet, this localization has its limits.
Raising the localization rate of parts solves supply and cost issues, but it doesn't automatically resolve who holds the power to define the vehicle.
By adopting Chinese solutions for core systems, joint ventures signal a willingness to align with China's market in terms of technology sourcing. However, adopting a solution is different from mastering system integration. Chinese suppliers provide modules like electric drives, autonomous driving, and cockpits—modules that may be mature on their own. But who defines the signal matrices, data interfaces, and upgrade paths between those modules determines whether the vehicle can continue to evolve.
When Chinese brands pursue full-stack self-development or deep customization, they can define these interfaces from the ground up, allowing for continuous optimization via OTA after launch. From this perspective, joint-venture brands may face longer verification processes for data feedback, feature updates, and cross-system debugging.
If these overlapping boundaries aren't broken, the improvement in joint-venture EVs will likely remain a localized rebound rather than a systemic turnaround. After all, the constraints vary by brand. Some have pushed their Chinese teams to the forefront, gaining greater autonomy in vehicle definition, data, and costs. Others remain constrained by global platform rhythms and decisions from foreign headquarters, keeping their localization efforts at the level of parts substitution.
It is precisely this difference in the ability to break through boundaries that determines the actual performance of different joint-venture brands in the new-energy race today.
The Divergence of Joint-Venture EVs
The brand landscape of the joint-venture EV market is undergoing a divergence, and the underlying logic can be explained by shifts in sales structure.
In the first seven months of 2026, the joint-venture new-energy penetration rate rose to 25.1%, an increase of 8.6 percentage points. Breaking down the powertrain mix: the pure-electric share climbed from 15.2% to 21.6% (up 6.4 percentage points), plug-in hybrids rose from 1.2% to 2.8% (up 1.6 percentage points), and range extenders increased from 0.1% to 0.7% (up 0.6 percentage points). Meanwhile, among internal combustion vehicles, the ICE share fell from 61.3% to 53.0% (down 8.3 percentage points), FHEV rose from 9.8% to 11.9%, and MHEV 48V dropped from 12.4% to 10.0%.
Clearly, the rise in joint-venture EV penetration is driven primarily by pure-electric models. While plug-in hybrids and range extenders are growing fast, their absolute numbers remain too small to alter the overall structure.
Moreover, the growth led by pure-electric vehicle models is characterized by a low baseline. The incremental gains in joint-venture EVs come mainly from a few models built on Chinese platforms and supply chains. These vehicles align closely with Chinese consumer demands in pricing, intelligence, and space, allowing them to generate concentrated sales quickly. However, competition in the domestic pure-electric market is intensifying in parallel. Traditional indigenous brands and new entrants are densely populating the 100,000 to 300,000 yuan price bracket. If joint-venture EV products lag in refresh cycles, cost control, or intelligent features, sales become vulnerable to volatility.
Whether the growth in joint-venture pure-electric market share is sustainable will depend on whether future products can maintain current pricing strategies and configuration levels, rather than relying on periodic volume spikes from a single model.
The rising volume of plug-in hybrids and range extenders reflects a strategic adjustment by joint-venture brands regarding powertrain routes. Previously, joint-venture new-energy offerings were almost exclusively pure-electric, with very few plug-in or extended-range options. In 2026, this situation began to shift. SAIC Volkswagen launched a hybrid strategy featuring the ID.ERA9X as its range-extender flagship and the Passat ePro and Tiguan L ePro representing plug-in hybrids, pushing both technology paths in parallel. Other joint-venture brands are also accelerating the introduction of plug-in and extended-range models.
Image source: SAIC Volkswagen
The motivation behind this adjustment is straightforward: pure-electric vehicle products struggle to compete head-on with indigenous brands in the short term regarding cost, charging, and intelligence. Plug-in hybrid electric vehicles and range-extended electric vehicles, however, can leverage existing internal combustion powertrain expertise and utilize current sales and after-sales networks while simultaneously meeting consumer demands for range and charging convenience.
For joint-venture brands, plug-in hybrids and range extenders may represent a more realistic transitional solution than pure electrics.
However, whether this transitional solution translates into actual sales depends on product density and the ability to control costs. While the market share gains for joint-venture plug-in hybrids and range extenders are notable, their absolute volume remains low. The number of models available is still limited, failing to form comprehensive price-band coverage or achieve economies of scale.
Furthermore, indigenous brands have already established strong cost advantages and user recognition in the plug-in hybrid market. As latecomers, joint-venture brands must offer more compelling proposals in pricing, configuration, and channels to wrest share from local competitors. If the launch pace for plug-in and extended-range models is too slow, or if pricing lacks competitiveness, joint ventures risk continuing to miss the market window during this powertrain adjustment.
From a brand strategy perspective, the root of this divergence lies in differing judgments regarding powertrain routes and market timing. Brands that are growing fast have either launched competitive China-specific models in the pure-electric market or rapidly deployed plug-in hybrids and range extenders, creating a multi-powertrain mix. Declining brands generally suffer from aging pure-electric lineups and slow deployment of plug-in and extended-range models. Some brands, despite deep strategic planning, have faced a timing mismatch between product launches and market demand, preventing strategic investments from translating into sales in time.
On a deeper level, the shift in sales structure reflects a changing role for joint-venture brands in the new-energy sector. Previously, they were technology exporters; now, they increasingly act as technology integrators and responders to market demand.
Advancing on multiple fronts—pure electric, plug-in hybrid, and range extender—appears to be a product strategy enrichment on the surface. In reality, it is a pragmatic choice for joint-venture brands facing insufficient competitiveness in pure electrics.
Whether this choice succeeds depends on whether plug-in and extended-range models can match indigenous brands on cost, and whether Chinese teams can secure greater autonomy in product definition and launch timing. Without these prerequisites, a multi-pronged approach risks becoming a scattered effort that fails to generate synergy.
Systemic Restructuring of Joint-Venture EVs
The differences in choices regarding powertrain routes and product timing all point to a single question: Can these choices be executed? Do joint-venture automakers possess the systemic capabilities to sustain the competitive pace of the Chinese market?
Some brands have already streamlined the chain from definition to delivery under the leadership of their Chinese teams. However, many others remain constrained by global platform rhythms, decisions from foreign headquarters, and transnational management processes, leaving a generational gap between product launch speeds and market demand.
In other words, beneath the surface of diverging market performance, the decisive factor is whether the systemic logic of these enterprises has aligned with the Chinese market.
The structural shortcomings of the traditional joint-venture model are fully exposed: core technology R&D is largely dominated by overseas teams, decision-making chains are long and slow to respond, supply chain localization is low, and product iteration speeds struggle to match the upgrade rhythm of the domestic market. Wang Qian, deputy general manager of Dongfeng Nissan Motor Sales Co., Ltd., bluntly stated that joint-venture brands are no longer facing just shrinking market share, but a complete reconstruction of competitive logic. The underlying formula of the "old joint venture" has been thoroughly shattered by China's new-energy market.
Old formulas cannot generate new answers.
The transition from global adaptation to China customization essentially requires joint-venture automakers to undergo multiple transformations.
First is the transfer of decision-making power. Toyota has established a completely new Chinese R&D system, handing over decision-making authority for China-specific models to local teams. Dongfeng Nissan has also begun allowing its Chinese team to make decisions directly and lead core technology R&D, with its N series having launched several range-extended and pure-electric models.
Image source: Dongfeng Nissan
The delegation of decision-making power is not a simple adjustment of authority; it is a re-answering of the fundamental question of who understands the Chinese market better.
Second is the restructuring of the supply chain system. One core reason joint-venture EVs were previously priced out of the local market was that foreign technical standards and supply chains drove up BOM costs per vehicle, resulting in terminal prices that were tens of thousands of yuan higher for the same configuration. Now, a core target for many mainstream joint ventures is to increase supply chain localization rates to directly compress costs.
At the Chengdu Motor Show 2026 in August, the pricing strategies of new joint-venture models reflected the initial results of this shift: the Beijing Hyundai Ioniq V was priced between 119,900 and 139,900 yuan, while the Volkswagen ID.ERA 5S carried an official guide price of 119,900 to 149,900 yuan. With various incentives applied at the show, the limited-time price dropped as low as 89,900 to 119,900 yuan—breaking below the 90,000 yuan entry barrier and plunging directly into the core price range of indigenous plug-in hybrids. It must be noted that the room for price reduction on these new vehicles stems largely from cost compression achieved through supply chain localization, rather than a simple strategy of sacrificing price for volume.
The third transformation is the reset of brand perception. The biggest non-financial cost facing joint-venture EVs is the consumer stereotype that their intelligence lags behind by a generation. As some industry experts bluntly put it, consumer impressions of joint ventures may still be stuck a decade ago. Reversing this perception requires an entire product cycle.
Drawing on the past experience of Japanese and Korean firms, Hyundai took a decade of product iteration to reshape its brand in North America, and Toyota's Lexus spent several years establishing its brand perception upon entering the U.S. luxury market. Given that the iteration speed of China's new-energy market is far faster, the window of opportunity for joint-venture brands to transform is far more urgent.
Looking at the competitive landscape, brands like Dongfeng Nissan, Volkswagen (including SAIC Volkswagen, FAW Volkswagen, and Anhui Volkswagen), SAIC General Motors' Buick, and GAC Toyota have each found their own phased paths. Dongfeng Nissan relies on its "GLOCAL" model and N-series product matrix to establish preliminary coverage in the 90,000 to 200,000 yuan price band. Volkswagen, through deep cooperation with XPENG and comprehensive alliances with other Chinese tech firms, has achieved a fairly comprehensive technology roadmap, though it still likely needs to accelerate product delivery. Buick's "ENCASA" series, centered on the E7, has made a breakthrough in the plug-in hybrid medium SUV market, though the breadth and depth of its product line remain limited. Meanwhile, GAC Toyota's BoZhi series maintains a lead on joint-venture EV sales charts thanks to a high proportion of Chinese components and precise pricing.
However, it must be said that while the combined new-energy sales of these joint-venture brands lead the JV camp absolutely, their share of the overall Chinese new-energy market remains limited. The breakout of joint-venture EVs currently appears as a localized breakthrough by a few brands, rather than a collective reversal of the entire joint-venture camp.
In summary: Examining the situation from a longer-term perspective, the question for joint-venture EVs is not whether they can stage a comeback, but in what posture they will participate in the competition. Analysis by Gasgoo Automotive Research Institute indicates that leading joint ventures will continue to shore up gaps in intelligent electric technology through local partnerships and accelerate their new-energy layouts, but their overall industry share will continue to contract in the short term.
This suggests that the endgame for joint-venture EVs may not be reclaiming dominance of the Chinese market, but rather finding an indispensable niche within the new competitive landscape. Joint ventures that can effectively combine global engineering prowess with the efficiency of Chinese supply chains and the decision-making speed of Chinese teams will have the opportunity to establish differentiated advantages in specific segments. Conversely, brands that still await decisions from overseas headquarters and rely on importing global models risk becoming further marginalized in this structural restructuring.
The year 2026 for joint-venture EVs will be one of unprecedented localization depth, yet the gap in systemic capabilities remains significant. To judge the ultimate trajectory of the joint-venture transformation, one should not look only at strategic declarations at press conferences, but rather observe more fundamental metrics: the actual decision-making power of Chinese teams, whether cost advantages from local supply chains are passed through to terminal pricing, and whether the intelligent experience of products meets the baseline expectations of Chinese consumers. The pace of change in these indicators will ultimately determine the position of joint-venture EVs in the future landscape of China's automotive industry.
