China EV market: what a foreign EV service business must get right

China has 43.97 million new-energy vehicles on its roads, and more than half of the new cars sold there in 2025 were electric. For a foreign EV service business, that headline is both the opportunity and the trap: the fleet is enormous, but the part of it an outside operator can realistically service is far smaller — and the route in does not allow conventional franchising on day one.

This article is for automotive groups, investors and workshop operators weighing the China EV market as a place to open specialist service centres. It draws on our China EV market report, which reaches a verdict of conditional go.

The China EV market is vast; the service opening is narrower

Start with what is certain. China's NEV stock reached 43.97 million at the end of 2025, of which 30.22 million were battery-electric and the rest mainly plug-in hybrids and range extenders, according to Ministry of Public Security figures reported by Gasgoo. Electric-car sales passed 13 million in 2025, a 55% share of new cars under the IEA's definition. The national charging network stood at 20.1 million facilities, against a target of 28 million by 2027.

Be careful with sales figures. Three are commonly quoted, and they measure different things:

For a service business the stock is the figure that matters, and it grows under every credible scenario:

vehicles

2025 from official statistics. The 2030 values are EVS planning scenarios anchored to China's 2030 policy direction.

The catch is age. Most of China's electric fleet is young and still inside manufacturer warranty, so conventional repair demand arrives later — even though each vehicle carries more software and high-voltage electronics than a comparable car elsewhere. Our model treats only about 18% of the fleet, roughly 7.91 million vehicles, as independently addressable today, and puts the serviceable market in the target regions at about RMB2.88 billion a year. Those are EVS assumptions and are labelled as such; the point is that the opening is real, but it is a fraction of the headline.

The Chinese EV brands a workshop has to service

Outside China, a specialist can build a business on Tesla and a handful of European premium brands. Inside China, local brands dominate and platform breadth is not optional. Based on the CPCA 2025 brand ranking, these are the families a workshop has to plan for:

Diagnostic access decides which of these you can actually take on. China's automotive-industry anti-monopoly guidelines support the principle of access to repair information, but real subscriptions vary by manufacturer. Our report sets a hard gate: lawful diagnostic coverage for at least 80% of the target platforms' fleet before capital is committed. What that means on the workshop floor is covered in what a specialist EV workshop needs.

Tuhu and the OEM networks set a high bar

Competition in China is structurally stronger than in Germany or the United States. Manufacturer and dealer networks hold the warranty, the software, the branded parts and the customer app. Tesla runs its own service centres across mainland China.

And the independent market already has a scaled, listed platform. Tuhu, the Hong Kong-listed car-care chain, ended 2024 with 6,874 workshops across 318 prefecture-level regions, and 2.7 million users bought new-energy vehicle services on its platform that year — up 105% — according to its 2024 annual results as reported by 36Kr. Tuhu is also moving into specialist repair of NEV battery, motor and electronic-control systems — the same work a foreign specialist would build its case on.

That changes the positioning. A foreign entrant will not win on convenience or price against networks like these. It can win on out-of-warranty, multi-brand, evidence-led specialist work — battery diagnosis backed by documented state-of-health reports, high-voltage repair, thermal systems and premium-brand electronics — the jobs where a network's scale matters less than a technician's depth.

Why you cannot franchise in China on day one

Franchising in China is regulated, and the first rule surprises most foreign brands. Under what is known as the 2+1 rule, a franchisor must have been operating at least two outlets for a year before it franchises, and registration with MOFCOM is mandatory, as Pinsent Masons' guide to franchising in China sets out. Trade marks registered outside China are generally not protected without a local registration, and China runs a first-to-file system — so register the brand before announcing the market.

The sequence our report recommends is therefore a local joint venture or licence first, conventional franchising later:

• WFOE or joint venture. A wholly foreign-owned enterprise (WFOE) gives full control but means building local capability from nothing; a joint venture with an established automotive group brings sites, staff and relationships. Check the current foreign-investment negative list and MOFCOM's foreign investment guide for the structure you choose, and get a written opinion from MOFCOM-qualified counsel before relying on it.
• Operate first. Company-run centres build the track record the 2+1 rule requires, and the operating data any later franchise offer will need.
• Meet the local standards. Maintenance businesses are held to national standards such as GB/T 16739.1-2023, and used traction batteries fall under the State Council's power-battery recycling measures. Compliance is local, operational and data-intensive.

Where to start: Shanghai–Suzhou, with gates

Doing business in China as a service operator is a regional decision, not a national one. Our screening ranks the Shanghai–Suzhou–Hangzhou cluster as the primary pilot, with Suzhou worth considering for its cost base, and keeps the Greater Bay Area as the second option.

Two disciplines matter more than the location:

1. Do not underwrite a workshop on consumer subsidies. Incentives support fleet growth; they do not pay for a service bay.
2. Treat the first 90 days as validation, not launch. The report makes the evidence gaps explicit: three compliant six-bay site quotations per cluster, a live diagnostic purchase-and-test matrix for ten platforms, recruiter quotes for high-voltage roles, and 100 paid jobs with 30 buyer interviews to prove willingness to pay.

The China EV market is likely to be the largest electric fleet any service business ever addresses. That is exactly why it rewards the operators who enter narrowly, prove the economics in one cluster, and franchise only once the model — and the 2+1 track record — exists. Read the full China EV market report, see how the EVS partnership model works, and talk to us about a China territory.