China's southern island province of Hainan has become the country's first to announce a ban on gasoline-powered vehicle sales by 2030, according to a plan released by the provincial government on July 3. The ban will apply to all new vehicles in both private and public sectors, including buses, taxis, and rental vehicles, with exceptions only for 'special purpose' vehicles. The province aims to maintain a ratio of one charging pile for every 2.5 EVs and increase the share of new energy vehicles on its roads to almost half, up from under a quarter in 2025. Hainan first proposed this ban in 2019 and has consistently led China in EV adoption, with EVs accounting for nearly three-quarters of all new vehicle sales in April, the highest share nationwide. The province's geographic advantages as a small island have helped accelerate the transition, as many of China's latest EV models can complete the province's popular 600-kilometer coastal highway on a single charge.
China's electric vehicle market is witnessing a dramatic shift toward larger, heavier vehicles that are straining the nation's infrastructure. According to reports from Business Standard, six out of 10 new cars launched in the first half of this year stretched more than 5 meters — approximately the length of a Ford Explorer SUV. By comparison, just 2 per cent of new models were compact vehicles under 4.5 meters, down from 13 per cent a year earlier, as reported by Cui Dongshu, secretary-general of the China Passenger Car Association. This trend is creating significant challenges for road maintenance and funding mechanisms.
The popularity of large electric vehicles is creating a fiscal dilemma for China's local governments. As reported by Business Standard, Beijing bankrolls major national highways and collects a fuel tax that is distributed to regional authorities to maintain local roads. However, that revenue is dwindling as EVs, which tend to be heavier than gasoline cars, account for an ever-growing slice of China's vehicle fleet and cause more road damage. A study by a research unit at the nation's transport ministry found China faces an annual funding shortfall of roughly 50 per cent for ordinary road maintenance and management, with around 40 per cent of local roads trapped in a critical bottleneck. The shrinking number of gasoline-powered vehicles has also decreased road maintenance funds, despite the surcharge encouraging EV adoption.
China's EV industry has experienced remarkable growth, with the share of EVs among new vehicle sales nationwide rising from under 6% in 2020 to over half in 2025, according to the Ministry of Industry and Information Technology. The Centre for Research on Energy and Clean Air (CREA) estimates that EVs displaced 33.7 million tonnes of oil equivalent in the first half of 2026, roughly equal to 6% of China's crude oil imports in 2025. This oil displacement has become a key driver of cleaner air in China, with experts noting that further progress will depend on cutting coal-related emissions and reducing petrol and diesel combustion. The improved vehicle reliability and driving range of EVs have made them increasingly attractive to consumers, despite policy changes that have rolled back EV tax concessions.
For long-term infrastructure funding, policymakers are exploring comprehensive reforms to road funding mechanisms. Pilot programs in provinces like Hainan are using satellite navigation systems to track targeted vehicles, laying the groundwork for a dynamic, distance-based mileage tax. The province's unique approach includes bundling road maintenance fees and tolls into a fuel surcharge since 1994, making it the only province in China without highway toll stations. State-backed media have called on automakers to reduce oversized vehicles, with the People's Daily arguing that 'blindly scaling up vehicles not only renders third-row seating a useless gimmick, but also clashes with existing urban infrastructure and drives up overall energy consumption.'
