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Decoding New-Energy vs. Petrol Cars in 2025
Jul 08,2025
2024 was hailed as the inaugural year of the new energy vehicle (NEV) era, with NEV market penetration surpassing that of traditional internal combustion engine (ICE) vehicles for the first time. As we move into 2025, NEVs continue to lead the market, with models like the Geely Galaxy, BYD Seagull, and Wuling Hongguang securing the top three spots in sales. So, for those planning to buy a car in 2025, how should you make the right choice?
I. Ownership Costs: Economic Factors Drive Market Segmentation
1. Purchase Costs: Policy Incentives Reshape the Pricing Landscape
New energy vehicles (NEVs) have significantly lowered the barrier to entry through generous government incentives. In 2025, NEV buyers continue to benefit from purchase tax exemptions and additional local subsidies in some regions. Combined with automakers’ volume-driven pricing strategies, NEVs are now priced competitively—often matching or even undercutting comparable gasoline vehicles. For example, the Wuling Bingo EV with battery-swap capability has a pre-sale price of just $10,200, whereas a similarly sized gasoline car like the Volkswagen Lavida still sells for around $12,249.
By contrast, internal combustion engine (ICE) vehicles have been forced to slash prices amid growing pressure from NEVs. It’s now possible to buy a Volkswagen Magotan for under $22,760 or even drive away in a Jaguar for as little as $18,000. Still, these aggressive discounts have done little to shift consumer preference—especially when comparing similar features like driver assistance systems and infotainment, where EVs often have the upper hand.
2. Energy & Maintenance: Electricity Brings Clear Savings, But Hidden Costs Remain
- Energy Costs: Based on an annual mileage of 20,000 km, NEV owners typically spend just $500–$800 on electricity each year, while gasoline cars cost between $1,000–$5,000 in fuel. For those with home charging setups, the cost can be reduced by up to 40%. Over an 8-year ownership cycle, the savings can amount to the equivalent of half—or even a full—vehicle. This remains a major advantage even if resale values for used NEVs lag behind.
- Maintenance Costs: Thanks to simplified drivetrains (no engine or transmission), NEVs require significantly less upkeep—averaging just $500 per year, roughly one-quarter that of gasoline vehicles.
That said, insurance premiums for NEVs are generally 20%–50% higher, and battery replacement remains a key concern. For instance, a lithium iron phosphate (LFP) battery can cost up to ¥34,000 (~30% of the total vehicle value). However, advances such as CATL’s CTP 3.0 technology are bringing battery costs down by 30%, helping ease consumer concerns.
3. Resale Value: NEVs Narrow the Gap, Some Now Outperform ICE Vehicles
For the first time in 2025, NEVs surpassed gasoline cars in three-year residual value (62% vs. 58%). Premium models like the AITO M9 lead the pack with a remarkable 86.4% retention rate. Meanwhile, ICE vehicles are increasingly reliant on ride-hailing demand to maintain a modest 55% residual value.
II. Technology Maturity: ICE Vehicles Strike Back with Smarter Features, While NEVs Lead in Core Innovation
1. ICE Vehicles: Intelligence Upgrades and Extended Warranties Prolong Lifecycle
In response to the growing dominance of NEVs, traditional gasoline vehicles are fighting back with technological trickle-down strategies and enhanced service offerings.
- Smart Features: The Toyota Camry Intelligent Edition is now equipped with the TSS 3.0 PRO system, supporting full-scenario assisted driving. Audi’s A4L offers a lifetime warranty, boosting consumer confidence and long-term value perception.
- Cost Competitiveness: Automakers are aggressively controlling costs. Changan’s new Blue Whale engine has driven ICE vehicle pricing down to as low as ¥50,000, aiming to capture demand in lower-tier and rural markets.
2. NEVs: Advances in Battery, Motor, and Electronic Control (the “Three Electrics”) Reshape the Industry
- Battery Innovation: CATL’s Shenxing PLUS battery enables up to 1,000 km of range and ultra-fast 15-minute charging, while reducing cost to just ¥0.8/Wh. BYD’s Blade Battery, developed through vertical integration, has slashed battery costs by 30% and is now used in models priced under ¥100,000 (~$13,600).
- Smart Ecosystems: Huawei’s ADS 3.0 system, co-developed with Avatr, delivers end-to-end AI decision-making. Xiaomi’s SU7 leverages cross-device integration—linking smartphone and in-car systems—to enhance user experience.
- Battery Swapping: NIO’s battery swap stations now support up to 312 swaps per day per site, with a per-kWh cost as low as ¥1. Wuling’s Bingo EV swap version completes a full battery change in under one minute and supports 80% of its models.
- Ultra-Fast Charging: In April and early May, BYD unveiled its megawatt fast-charging solution, and CATL launched a new generation of supercharging batteries. These advancements, along with Tesla’s Supercharger network, signal that ultra-fast charging is no longer a future dream but an emerging standard.
Technical Trade-offs:
- ICE Vehicles benefit from a mature repair and service network, and have an average powertrain failure rate of just 0.8%. However, they lag in intelligent features and digital experience.
- NEVs still face challenges in the reliability of their core “three-electric” systems. Some emerging brands report electric motor failure rates as high as 3.5%, and repairs often require specialized service centers, which can be costly. That said, with China’s upcoming national safety standard mandating that power batteries must not catch fire or explode, battery safety is set to significantly improve.
In summary, ICE vehicles continue to lead in mechanical reliability and ease of maintenance, while NEVs push the envelope in smart features and electrification. The result is a market increasingly defined by differentiated competition across various user segments.
III. Driving Range: Real-World Scenarios Determine the Winner
1. Range Stability and Energy Replenishment Efficiency
- Gasoline Vehicles: Typically offer 500–800 km on a full tank, with 98% range retention even in extreme cold (-20°C). Refueling takes just 5 minutes, making them ideal for long-distance, time-sensitive travel.
- NEVs: While many EVs claim a 600 km range, real-world performance drops to 300–400 km under high-speed and low-temperature conditions. However, innovations like CATL’s Shenxing PLUS battery—featuring a 3D honeycomb anode structure—have made significant strides, retaining full range even at -30°C and adding 580 km of range with just 15 minutes of fast charging. As battery technologies continue to evolve, cold-weather performance is expected to improve dramatically.
In terms of fuel efficiency, traditional fuel-sipping models like the Nissan Sylphy or Toyota Corolla achieve 4–5L/100 km. But plug-in hybrids like the BYD DM series can match—or even surpass—those numbers when operating in depleted battery mode. Combined with the increasing availability of advanced driver-assistance systems in NEVs, long-distance driving is no longer an exclusive strength of ICE vehicles.
2. Charging Network Coverage and Scenario Suitability
- Gasoline Vehicles: Benefit from a mature refueling network that is fully developed in both urban centers and remote areas.
- NEVs: In major cities, charging station density has already surpassed gas stations. However, rural and small-town coverage remains uneven. Queues at highway charging stations are still common, and fast-charging station penetration (defined as 80% charge in 30 minutes) currently sits at only 40%. That said, for daily commuting or local business use, home charging is sufficient for most users. And with new regulations requiring that all new parking facilities include charging infrastructure, accessibility will only improve over time.
EVs are ideal for:
- Urban commuters
- Drivers with access to home or workplace charging
- Users seeking cutting-edge tech and willing to accept rapid iteration in the market
Gasoline cars are better suited for:
- Frequent long-distance travelers
- Buyers prioritizing high resale value
- Users in areas with limited charging infrastructure
A middle-ground solution:
Plug-in hybrids (like the BYD DM-i) offer the best of both worlds—pure electric power for short commutes, and gasoline for longer trips—making them ideal for consumers in the transitional phase.
Note:
As vehicles are long-term investments for households and businesses, buyers should also evaluate the financial health and long-term viability of the manufacturer. A company burdened with excessive debt or operational challenges may be unable to provide timely maintenance and after-sales support in the future.
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