Government Targets Local Production of 500,000 Cars Annually with $1 Billion Export Goal

Under the draft auto policy 2026-31, the federal government is developing an ambitious revival strategy for its automotive sector, which has been struggling lately due to the pandemic and supply chain disruptions. 

The government is targeting ambitious annual production goals through the revival plan (500,000 units) over five years, increasing export levels, normalizing electric vehicle adoption, and increasing productivity levels across all segments of the automotive sector.

In addition to increasing production volume, the government would like to achieve a total of US$ 1 billion in automotive exports. A goal of this magnitude represents a significant milestone for a sector that has largely operated as an import business for many decades.

Perhaps most radical is a high New Energy Vehicle (NEV) share target for new vehicle sales. The policy sets a target for NEVs, including electric and hybrid models, to account for 30 percent of all new vehicle sales by 2031. To support this transition, authorities plan to establish 3,000 EV charging stations nationwide to fast-track large-scale electric adoption.