CINEVE | China’s Hainan Fuel Vehicle Phase-Out Creates New NEV Aftermarket Opportunities

Recently, the Hainan Provincial Government officially released the “14th Five-Year Plan for Hainan National Ecological Civilization Pilot Zone (Beautiful Hainan Development Plan for the 15th Five-Year Period)”, which clearly proposes the steady implementation of the 2030 ban on the sale of fuel vehicles. This will make Hainan the first province in China to achieve a province-wide phase-out of fuel vehicle sales, sending a clear signal of transformation for the domestic automotive aftermarket. At present, the number of new energy vehicles (NEVs) in China has exceeded 43.97 million units, while less than 3% of automotive service outlets have the capability to perform three-electric system maintenance. The talent shortage in this field has reached 824,000 professionals. Meanwhile, a large number of early-generation NEVs are entering the post-warranty period, creating a significant window of opportunity that cannot be overlooked by automotive aftermarket professionals.

1. Hainan’s Fuel Vehicle Phase-Out Accelerates, Putting the Era of Gasoline Vehicles on a Countdown

Hainan Province has released its 15th Five-Year Plan for Ecological Civilization Development, which clearly outlines the promotion of a province-wide ban on fuel vehicle sales by 2030. This means Hainan will become the first province in China to completely stop the sale of fuel vehicles. According to the plan, by 2030, new energy vehicles (NEVs) are expected to account for 45% of the total vehicle fleet in Hainan. The proportion of clean energy vehicles among newly added and replacement vehicles in public services and social operations, as well as the proportion of NEVs among newly added and replacement private vehicles, will both reach 100%.

This plan is not being implemented without prior groundwork. Hainan’s new energy vehicle market has already undergone years of development and preparation. In January 2026, the province’s NEV penetration rate reached 55.13%, with the total number of NEVs exceeding 540,000 units. During the 14th Five-Year Plan period, Hainan’s NEV penetration rate surged from less than 4% to 62.9%, placing its adoption speed among the fastest in China. By taking the lead in implementing a fuel vehicle phase-out policy, Hainan not only provides practical experience for China’s green and low-carbon transportation transformation but also signals that the exit of fuel vehicles in China has entered the countdown stage.

2. A Shortage of Maintenance Capacity Limits the Ability to Meet Local NEV Service Demand

Across China, there are approximately 400,000 fuel vehicle repair shops, while fewer than 30,000 workshops have the capability to provide new energy vehicle (NEV) maintenance services. Among them, only around 2% to 3% are able to independently perform in-depth inspections and repairs of the three-electric systems (battery, electric motor, and electronic control system). According to estimates, the talent gap in the NEV after-sales service sector has reached 824,000 professionals.

Due to Hainan’s island geography, the introduction of external technical talent and the cross-regional transportation of spare parts both involve higher costs, making the development of the local maintenance network more challenging and intensifying the imbalance between supply and demand. Among more than 1,300 registered repair shops in Haikou, only around 150 have launched electric vehicle maintenance services. Moreover, most of these workshops can only handle routine maintenance tasks, while resources capable of conducting in-depth inspections and repairs of core three-electric system failures remain extremely limited on the island.

Behind this supply-demand imbalance lies significant growth potential. After Hainan implements the fuel vehicle sales ban, the number of fuel vehicles on the island is expected to gradually peak and decline after 2030, while NEV ownership will continue to rise, driving sustained growth in maintenance and repair demand. Workshops that take the lead in investing in three-electric system diagnostic equipment and technical personnel training will be better positioned to capture the growing local NEV maintenance market and establish differentiated competitive advantages in the regional aftermarket.

3. The Wave of Out-of-Warranty NEVs and Policy Relaxation Create a New Growth Window for Independent Repair Services

The continued release of market demand is supported by multiple factors. Since 2016, China has implemented a warranty policy requiring new energy vehicle (NEV) manufacturers to provide no less than eight years or 120,000 kilometers of warranty coverage for core components such as power batteries and drive motors. Starting in 2024, the first batch of NEVs covered by this policy gradually began to enter the post-warranty stage. From 2026 to 2028, more than 3 million NEVs are expected to come out of warranty in a concentrated period. As a result, a large number of vehicle owners will no longer be limited to official brand after-sales channels, creating substantial market opportunities for independent third-party repair shops.

Meanwhile, supporting policies are gradually removing barriers that have restricted the development of the industry. The Interim Measures for the Management of Recycling and Comprehensive Utilization of Waste Power Batteries from New Energy Vehicles, officially implemented in April this year, requires automakers to provide repair workshops with access to key technical information, including power battery dismantling procedures and vehicle fault diagnosis data. This will gradually reduce the information barriers that have long prevented independent repair shops from carrying out three-electric system maintenance.

The development of supporting industries in the Hainan Free Trade Port also brings long-term growth potential. Hainan is planning to establish three major platforms: new energy vehicle exhibition and sales centers, parts transportation hubs, and tropical vehicle adaptation testing bases. After the implementation of customs closure operations, supportive policies such as zero tariffs and value-added processing incentives will attract more NEV-related companies to establish operations in the region. This will further improve local parts supply efficiency and accelerate the formation of a complete NEV maintenance ecosystem. Leveraging its unique geographical advantages, local repair businesses will not only serve vehicle owners across Hainan but may also have opportunities to expand into cross-border after-sales services targeting Southeast Asian markets, further extending their long-term business potential.

Hainan’s ban on fuel vehicle sales is only the starting point of a broader transformation. With more than 43 million existing new energy vehicles continuing to generate growing maintenance and service demand, after-sales repair has become a critical part of the automotive industry that can no longer be overlooked. For automotive aftermarket professionals across China, what is happening in Hainan today may become the future of other regions tomorrow. The transition toward vehicle electrification has become a long-term industry trend, and the current period represents a crucial stage for businesses to adjust their strategies and strengthen their technical capabilities. The window of industry growth will not remain open indefinitely. Companies that proactively improve equipment capabilities, invest in technician training, and establish comprehensive three-electric system maintenance services will be better positioned to keep pace with the transformation of the automotive sector and capture the growing maintenance opportunities created by the expanding NEV market.