Xinhua | June 23, 2026 In 1983, the first Santana sedan, a Volkswagen model that would later sweep the Chinese market, rolled off an assembly line in Shanghai, marking a new phase of China's car-making drive. Foreign automakers brought production lines and manufacturing know-how, producing models that were popular in their home markets. More than four decades later, China has become the world's largest auto market. While joint ventures continue to work with Chinese carmakers and foreign brands still account for a significant share of car sales, research is now conducted and products developed more closely aligned with the evolving needs of Chinese consumers. This year, Volkswagen and Chinese new energy vehicle (NEV) maker XPeng have begun mass production of their first jointly developed model. Mercedes-Benz has upgraded its Shanghai research & development (R&D) center into a global innovation hub. BMW executives have visited Great Wall Motor to explore deeper technology cooperation. Behind these shifts lies a fundamental transformation. Backed by rapid advances and technological prowess in NEVs, China is emerging as a leading source of automotive innovation and is helping reshape the global automotive industry. A visitor takes photos of a new energy vehicle chassis displayed at Xpeng Technology Park in Tianhe District of Guangzhou, south China's Guangdong Province on March 24, 2026. (Xinhua/Deng Hua) REWRITING THE RULES Chinese consumers are increasingly opting for NEVs, attracted by lower prices, reduced running costs and rapid technological advancements. Recent sales figures confirm NEVs are steadily gaining popularity. Data released by the China Association of Automobile Manufacturers on June 10 showed NEV sales in May reached 1.496 million units, up 14.4 percent year on year. NEVs accounted for 56.9 percent of all new vehicle sales, up from 40.9 percent in 2024 and 50.8 percent in 2025. In contrast, gasoline-powered models fell out