China boasts leadership in the global push toward clean energy—and rightly so. Its electric vehicle sales are surging and already outselling conventional cars, while no country is close to the massive Chinese investment in renewable energy and storage, and the record-setting additions of solar and wind power capacity.

Renewables, EVs, and related supply-chain industries have been contributing a record share of China’s economic growth in recent years.

But the green energy boom has led to such overcapacity, fierce price wars, and a race to the bottom that the Chinese authorities are looking to intervene in the market to slash excess capacity and low-quality production.

China’s push to boost renewables and EVs has claimed its first victim in conventional energy—demand for road transportation fuels has peaked as electric and LNG-powered vehicles have displaced part of the gasoline and diesel demand. The top Chinese oil and gas state giants admitted in their first-half earnings that new-energy vehicles are suppressing demand and sales of refined petroleum products.

While leading the world’s energy transition efforts, China is not giving up on coal and is commissioning the highest coal power capacity in nearly a decade—all in view of having reliable electricity capacity to boost energy security and avoid blackouts such as the ones from 2022 and 2023.

China has cemented its position as the world’s single largest investor in energy, the International Energy Agency (IEA) said in its World Energy Investment 2025 report.

“Today, China is by far the largest energy investor globally, spending twice as much on energy as the European Union – and almost as much as the EU and United States combined,” IEA Executive Director Fatih Birol said in the June report.

Last year, China’s clean energy investment topped $625 billion, almost doubling since 2015. Moreover, China also achieved its 2030 wind and solar capacity target in 2024, six years ahead of schedule, the IEA noted.

“Record-breaking renewables investment in China continues, advancing in tandem with the expansion of grid and storage for renewables while keeping coal in the mix,” the agency said.

China continues to expand coal, with investment expected to exceed $54 billion in 2025.

“While coal generation could serve as a supplementary backup to renewables, the scale of investment points to a deeper reliance on thermal power, driven by persistent concerns over electricity security,” the IEA added.

So, coal will remain in the mix.

At the same time, China accelerates green transition efforts by expanding EV charging infrastructure, storage projects, and large infrastructure to aid the expansion of renewables, Wang Hongzhi, director of China’s National Energy Administration (NEA), said this week.

China expects to exceed its target of having non-fossil fuel energy account for 20% of all consumed energy by the end of 2025, Wang said, adding that authorities now aim for a 25% share by 2030.

Still, the renewables boom is not leaving coal to fade to obscurity.

China commissioned as much as 21 gigawatts (GW) of coal power in the first half of 2025, the highest amount since 2016, the Centre for Research on Energy and Clean Air (CREA) and Global Energy Monitor (GEM) said in their H1 2025 biannual review of China’s coal projects.

Moreover, the renewable energy surge comes with structural challenges, which China needs to tackle in order to continue with the energy transition.

The surge in EVs and solar and wind power installations has resulted in excessive manufacturing capacity in key clean energy industries, igniting price wars that have hurt most companies in the cleantech sector, including the biggest solar panel manufacturers.

Chinese authorities realized last year that cutthroat competition, overcapacity, and low-quality manufacturing are hurting enterprises. Following months of introducing several measures to try to curb excess cleantech manufacturing capacity, China has now vowed to become more serious in addressing the problem.