Summary of Key Points
The government has recently increased its support for new energy vehicle (NEV) racing events, hoping to turn them into a new growth driver for automobile consumption as sales are declining. China already has a three-tier system for automotive events involving the state, local authorities, and private manufacturers. However, there are still three significant gaps compared to international standards: the events are large in scale but not profitable; there are many car buyers, yet the racing culture is weak; and although the automobile industry is strong, participation in these events is scattered and superficial. Chinese automakers started late and missed the opportunity to build their brands through racing. Now, they are trying to make up for these shortcomings, but face challenges such as international regulations, funding, and time constraints. Nevertheless, companies like Geely and Great Wall have begun to explore this area, and policies are shifting in favor of NEV events, which could lead to breakthroughs in the future.
Why Has the Government Suddenly Taken an Interest in Automotive Events?
Simply put, car sales are not performing well, so the government is looking for new sources of growth. In the first five months of 2026, passenger vehicle retail sales decreased by 19.5% year-on-year, and in June, the decline was even worse at 23.2%. Automotive events, on the other hand, are highly sought after. Along with the Formula One (F1) championship and the Olympic Games, they are considered among the three major sporting events, attracting a global audience of 1.6 billion in 2024. These events can boost brand awareness, drive technological innovation, and create new consumer scenarios (such as related products and track experiences).
In 2023, the government only provided support for the organization of these events; by 2026, its focus has shifted to cultivating domestically competitive NEV racing brands, with four new policies introduced: establishing a comprehensive system, optimizing mechanisms, creating consumer scenarios, and nurturing talent. The reason for this shift towards NEV events is that China accounts for 60% of global NEV sales and 70% of battery production capacity. By leveraging these events, China can enhance its advantages in the NEV sector and boost domestic consumption.
The Current State of Chinese Automotive Events
China has already established a three-tier framework for automotive events:
- National Level: There are 15 A-level events covering various types such as circuit races, rally races, and drift competitions (e.g., the CTCC Car Racing Championship and CRC Rally Championship).
- Local Level: Events are held in diverse locations, including the Xinjiang Desert Race and the Yunnan Dongchuan Mudslide Race, covering a wide range of terrains.
- Private/Maker Level: Companies like Geely have been organizing events for 20 years (e.g., the Geely Super GP League), and NIO has been involved in student Formula racing for 17 years. There are also regional competitions for brands like Porsche and Lamborghini.
However, compared to international events, there are three main shortcomings:
1. Large Scale but Low Profitability: F1 generated $3.9 billion in revenue in 2025 from broadcasting rights, sponsorships, and ticket sales, attracting 330,000 spectators to the Le Mans race. In contrast, the CTCC attracts only 200,000 spectators annually, with tickets costing around 100 yuan, and the organizer, Lisheng Sports, still incurred losses in 2025, relying on brand sponsorship to survive. The Xinjiang Desert Race generates 2.9 billion yuan in tourism revenue, but the event itself is still at a loss.
2. Many Consumers but Weak Racing Culture: China has the largest car fleet in the world (359 million vehicles), yet the racing culture is not well-developed. For example, although Chinese viewers accounted for 17.7% of the F1 global audience, Chinese driver Ma Qinghua is only known within the industry. In contrast, the UK, with a population of 67 million, has around 30,000 registered racers.
3. Strong Industry but Scattered Participation: There are over 100 domestic passenger vehicle brands, accounting for 69.5% of the market share, but participation in racing events is limited and superficial. International brands like Porsche have a complete ecosystem from track experiences to professional teams, while Chinese brands (such as Geely) have only recently started to establish pathways from enthusiasts to professional drivers. Chinese teams are absent from major international competitions like F1 and the WEC Hypercar series.
Why Didn’t Chinese Automakers Participate in Events Earlier?
It’s not that they didn’t want to; rather, they missed the opportunity due to high barriers:
- Late Start: China’s automotive industry began to develop through joint ventures in the 1980s, and domestic brands only emerged in the 2000s. By then, fuel vehicle technology was already mature, and established players like Volkswagen and Toyota had been participating in racing for decades. Chinese automakers had to focus on competing on price in a crowded market.
- International Regulations: Core F1 regulations are set by established manufacturers like Mercedes-Benz and Ferrari, and new teams need their approval to join. The FE series uses standardized batteries and chassis, limiting the use of China’s strong battery capabilities.
- Financial and Time Constraints: Participating in F1 requires significant investment—teams spend $200–300 million per year. For example, it took Porsche 19 years to win a championship at Le Mans. The low profit margins in the automotive industry mean there is little money available for such investments.
- Low Industry Profitability: With profit margins below 4%, automakers have limited funds for racing initiatives.
What Are Automakers Doing Currently?
Several leading companies are taking active steps in the racing arena:
- Great Wall: The company’s chairman, Wei Jianjun, participates in off-road races himself, emphasizing that racing is part of product development. Great Wall uses production vehicles (e.g., the H9) in events to test vehicle performance and improve civilian models.
- Geely: Geely has organized the Super GP League, which costs just 300 yuan to enter and allows drivers with a regular driver’s license to participate. They have also developed the Xingrui TCR racing car, which won a championship in an international event in 2026. Their goal is to use low-cost events to validate their technology and apply it to civilian vehicles.
- New Players: NIO initially participated in Formula E but couldn’t afford high costs and switched to student Formula racing, where they have trained 90,000 graduates over 17 years. BYD has become a safety car partner for French events and is considering entering F1.
- Xingtu: They have signed a five-year plan with the Le Mans organizers to send a Chinese team to compete there.
Future Opportunities
International regulations are favoring NEV events:
- F1 will increase the proportion of electric power in vehicles from 30% to 50% in 2026, which is an advantage for Chinese NEV manufacturers.
- The WEC Hypercar series will require hybrid vehicles starting in 2026, aligning with China’s technological focus.
- With government support for NEV events and China’s strong supply chain (batteries and motors), there is a chance to gain a foothold in international competitions.
However, it’s important to recognize that success requires long-term investment. While initiatives like Geely’s Super GP League have trained many drivers, only a few have made it to international events. Chinese automakers still have a way to go, but the journey has just begun.
(The translation maintains the original structure of headings and lists, using clear and concise language suitable for financial journalism, while adapting expressions to fit the target audience.)