China

China ended 2025 with 43.97 million NEVs, up 12.57 million in one year. The official NEV definition covers battery-electric, plug-in hybrid and fuel-cell vehicles. The fleet represented 12.01% of automobiles in use, so servicing demand will continue expanding even if new-vehicle growth slows.

The IEA's electric-car measure covers battery-electric and plug-in hybrid cars and is narrower than China's all-vehicle NEV wholesale statistics. On that basis, China sold more than 13 million electric cars in 2025, almost 55% of new-car sales and about six in ten electric cars sold globally. The report keeps these definitions separate rather than combining them.

Official stock milestones accelerated from 120,000 NEVs in 2014 to 20.41 million at end-2023 and 31.40 million at end-2024. The 2024 fleet added 10.99 million vehicles and newly registered NEVs reached 11.25 million. This rapid, recent growth means most vehicles are still young, but the 2020-2023 cohorts are now moving into higher-demand maintenance years.

The IEA expected China's electric-car share of new sales to reach around 80% in 2030 under stated policy settings. A July 2026 national target separately called for NEVs to reach around 30% of the total vehicle parc by 2030. EVS therefore uses 75 million, 95 million and 115 million vehicles as cautious, base and high planning cases—not as published forecasts.

China had approximately 20.1 million charging facilities at end-2025. The national 2025-2027 action plan targets 28 million facilities and more than 300 GW of public charging capacity by end-2027, sufficient by the plan's definition to serve more than 80 million EVs. EVS should not treat charger installation as its core proposition; charger fault diagnosis, port repair, thermal management and fleet charging-health analytics are more defensible adjacencies.

An industry overview filed with Hong Kong Exchanges reported that China's average passenger-vehicle age rose from 5.4 years in 2019 to 6.6 years in 2023. The NEV parc is materially younger because most units were registered after 2020. EVS should therefore prioritise diagnostics, electronics, ADAS, thermal systems, tyres, suspension, collision safety and battery assessment ahead of an engine-style heavy-repair model.

The model begins with the sourced 43.97 million end-2025 NEV stock. EVS assumptions are explicit: 0.65 relevant specialist jobs per vehicle per year; RMB 1,600 average revenue per job; 18% of the fleet currently out of OEM warranty or independently addressable; and 35% of that pool in target high-density regions and customer segments. The resulting TAM, SAM and pilot SOM are planning envelopes, not audited market revenue.

1. Premium multi-brand owners: Tesla, Zeekr, NIO, Li Auto, XPeng, Mercedes-EQ, BMW i, Audi e-tron and Porsche Taycan owners wanting transparent diagnosis outside the dealer.
2. Used-EV buyers and dealers: battery state-of-health, accident/HV integrity, software-function checks and certification.
3. Fleets: ride-hailing, rental, corporate and delivery fleets buying uptime, predictable turnaround and mobile triage.
4. Collision and insurer partners: safe isolation, post-collision battery assessment and calibrated reinstatement.
5. GCC-linked exporters and owners: inspection, documentation and technical support for Chinese EVs exported to the Gulf.

CPCA retail data reported by CnEVPost placed BYD first in 2025 passenger-NEV sales at 3.48 million and 27.2% share, followed by Geely at 12.2%. Changan, SAIC-GM-Wuling, Tesla China, HIMA, Chery, Leapmotor, Seres and Xiaomi EV completed the reported top ten. The concentration makes BYD and Geely coverage mandatory, while premium customers justify Tesla, NIO, Zeekr, Li Auto and imported-platform capability.

OEMs control warranty, software, connected-vehicle data, branded parts and increasingly charging or battery-swap ecosystems. Independent scale is also formidable: TUHU describes itself as China's leading independent automotive-service brand, while Tmall Auto and JD Auto add platform distribution. Local workshops compete aggressively on labour price. EVS cannot win as another general repair shop; it needs demonstrable technical authority, bilingual premium service and auditable battery/HV outcomes.

1. Shanghai-Suzhou-Hangzhou: best initial balance of premium owners, Tesla and international-brand density, affluent used-EV demand, technical labour and cross-border business links. Suzhou can reduce occupancy cost while staying inside the cluster.

NEVs bought in 2024-2025 received purchase-tax exemption capped at RMB 30,000 per passenger vehicle. For 2026-2027 the purchase tax is halved, capped at RMB 15,000. Eligible vehicles must appear on the official catalogue. Local trade-in, licence-plate and fleet measures vary, so city-level incentives must be refreshed immediately before investment.

China's standard resident-enterprise income-tax rate is 25%. Preferential rates may apply to qualified high/new-technology enterprises and designated encouraged projects, but a vehicle-service workshop should assume the standard rate unless written eligibility is obtained. Incentive discussions should focus on local investment agencies, training grants, industrial premises and equipment treatment rather than relying on a high-tech tax label.

The current national standard GB/T 16739.1-2023, effective 1 April 2024, specifies operating conditions for whole-vehicle maintenance and repair enterprises. Local transport authorities administer registration or filing, categories, premises and inspections. Scope, fire approval, environmental controls and hazardous operations must be confirmed for the chosen district before lease signature.

Local rules show how requirements can exceed generic business registration. Guangzhou's rules effective 1 January 2025 require alternative-energy repair operators to follow applicable technical standards and impose dedicated conditions for certain hazardous maintenance work, including minimum areas, ventilation, explosion protection, safe separation and public disclosure of pricing and warranties. The final pilot jurisdiction needs a clause-by-clause compliance matrix.

Interim national battery-recycling measures took effect on 1 April 2026. They introduce battery digital identities, a national traceability platform and full-chain accountability. EVS should not store or trade retired packs outside authorised channels; every removed module or pack requires chain-of-custody, quarantine, transport and handover procedures agreed with licensed partners.

A foreign-invested workshop must apply Chinese employment, written-contract, social-insurance, working-time, overtime and occupational-safety rules, with provincial and municipal implementation. National average wages are not a technician-cost proxy: the pilot must obtain role-specific local quotations for a high-voltage master technician, diagnostic technicians, service advisers and HSE supervision, then load mandatory employer contributions and training time into the labour budget.

The 2024 foreign-investment negative list, effective 1 November 2024, reduced restricted areas to 29 and removed the final manufacturing restrictions. Automotive maintenance is not identified as a nationally prohibited foreign-investment category in that summary, but company scope, local permits, cybersecurity/data rules and any restricted connected-vehicle activity still require Chinese legal review.

China's commercial-franchise regime generally requires a franchisor to demonstrate at least two directly operated outlets for more than one year (the '2+1' rule), make pre-contract disclosures and register the first franchise agreement with MOFCOM within the applicable period. Overseas outlets may sometimes support qualification, but EVS must obtain a written opinion on entity, evidence and filing route before selling franchises.

Launch: multi-brand diagnostic scan and root-cause report; battery state-of-health and thermal diagnostics; high-voltage isolation and component replacement; charging-port/on-board-charger/DC-DC faults; air-conditioning and heat-pump work; brake, tyre, suspension and alignment; ADAS calibration through approved equipment/partners; used-EV and collision inspections; fleet preventive-maintenance plans; mobile rescue and safe recovery.

Phase 2 only: battery-module repair, inverter/e-motor rebuild, insurer collision centre and remanufactured components after demand, safety, warranties and waste routing are proven.

Exclude initially: commodity detailing, price-led tyre retail, battery-pack resale, proprietary software modification, unauthorised calibration bypasses and any service that risks OEM cybersecurity controls.

Use a Chinese operating partner with an existing compliant workshop, local supplier accounts and transport-authority history. EVS licenses brand, SOPs, audits, training, customer journey and reporting; the partner employs staff, operates the entity and holds local permissions. Reserve audit rights, customer-data boundaries, technical-IP protection, approved procurement, incident reporting, warranty reserves and termination controls. Convert to franchising only after counsel confirms 2+1 compliance and the pilot produces repeatable unit economics.

The illustrative six-bay model is denominated in RMB and excludes land purchase, financing, tax and partner royalties. At 300 productive days, base utilisation of 1.8 jobs per bay-day and RMB 1,600 average revenue per job produces RMB 5.18 million annual revenue. With a 55% contribution margin and RMB 3.30 million fixed operating cost, the base case remains approximately RMB 0.45 million loss-making. Break-even requires roughly RMB 6.0 million revenue at that contribution margin. The pilot therefore needs higher-value diagnostic/battery work, fleet contracts or lower fixed cost—not merely more commodity jobs.

• OEM/data lockout: secure lawful subscriptions and test coverage before launch; publish an unsupported-function register.
• Price compression: sell evidence, warranty, turnaround and fleet uptime rather than lowest labour rate.
• Battery/fire liability: segregated HV zones, rescue plan, thermal monitoring, insurer sign-off and licensed waste partners.
• Franchise non-compliance: delay franchise sales until Chinese counsel confirms 2+1 evidence, disclosure and filing.
• Partner/IP risk: ring-fence EVS manuals, diagnostics and data; use staged licensing and audit rights.
• Parts quality/counterfeit exposure: approved vendors, traceability and customer disclosure.
• Connected-vehicle data: localise systems where required, minimise collection and obtain a cybersecurity/data opinion.
• Geopolitical and repatriation risk: stage capital, contract in RMB where appropriate and model dividend/tax restrictions.

Days 1-30 — prove legal and technical access: retain Chinese automotive/franchise counsel; shortlist three Shanghai-Suzhou operators; map district filing, fire, environment and battery-waste rules; test diagnostic and parts access on the ten priority platforms; interview 20 fleet/used-car/insurer buyers.

Proceed to a permanent centre only if all gates pass: (1) lawful diagnostic coverage for at least 80% of the target platform parc; (2) documented workshop, fire, environmental and battery-waste compliance; (3) 100-job validation with average revenue per job of at least RMB 1,600; (4) contribution margin at least 55%; (5) first-time-fix rate at least 85% and comeback rate below 5%; (6) two contracted fleet/dealer channels representing at least 25% of base utilisation; (7) base-case path to monthly break-even within 12 months; and (8) written franchise/FDI/data opinion. Fail or pause if any safety/legal gate fails, if projected mature-site revenue stays below RMB 6.0 million, or if OEM access prevents safe repair.

Research prioritised Chinese government, National Bureau of Statistics, IEA, regulator, exchange filing and company primary sources available on 6 August 2026. Chinese NEV wholesale sales, domestic registrations and IEA electric-car sales use different scopes and are shown separately. Market-size and pilot calculations are EVS planning models with every assumption exposed. City service-centre counts, real-estate quotes, technician salaries, OEM diagnostic subscription prices and customer willingness-to-pay require primary fieldwork before capital approval. Currency conversions are intentionally omitted from core economics to avoid false precision; local decisions should use contemporaneous RMB quotes.