Back in May, we reported that China is on the way to becoming the world’s first ‘‘electrostate’’ thanks to the ongoing EV boom coupled with rapid industrial electrification. According to a study by the International Energy Agency (IEA), China’s electrification rate has hit 30%, significantly ahead of the U.S. and the EU, where the electrification rate has plateaued at ~22% in recent years.

Last year, electric vehicles (EVs) made up approximately 47.9% of the total passenger car sales in China, a huge increase from 2020, when plug-in EVs accounted for just 6.3% of total sales. However, China’s booming renewable energy sector is not only being driven by a large domestic market but also by robust green energy exports. Indeed, China’s green tech exports hit a record $20 billion in August alone, creating a ‘‘new energy system.’’

Interestingly, China’s clean energy sector is doing brisk business with less developed economies even as the U.S. retreats from the clean energy race. In fact, 51% of China’s EV sales growth in the current year has come from nations outside the Organisation for Economic Co-operation and Development (OECD). Exports to ASEAN (Association of Southeast Asian Nations) surged 75% during the first eight months of 2025, while EV exports to Africa nearly tripled, led by Morocco and Nigeria with the West African nation recording a six-fold surge in purchases. Meanwhile, exports to the Middle East jumped 72% while sales to Latin America grew 11%. But it’s not just electric vehicles. China exported 46 GW of solar PV equipment in August, more than Australia’s total installed capacity.

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“China’s electrotech is becoming the basis of the new energy system, with continued cost reductions driving faster growth than ever, especially in emerging economies,” Ember analysts wrote.

And, it’s all being driven by a virtuous cycle of falling renewable energy prices, an economic phenomenon where increased adoption and production lead to lower costs, which in turn encourages more adoption and production, creating a self-sustaining downward spiral of prices and upward surge in deployment. This cycle is driven by technological advancements, economies of scale in manufacturing, increased competition, and more efficient installation and operation of renewable systems. China’s value of green energy esports has actually declined by 47% in dollar terms since its March 2023 peak, with the country’s solar manufacturers currently embroiled in a vicious price war. Since 2020, China has seen dramatic price reductions in both solar panels and EV batteries, with solar module prices falling significantly. An average EV battery pack price in China dropped by about 30% in 2024, contributing to a nearly 10% drop in average BEV SUV prices for the year.