Internal Combustion Engines Plus Intelligence: Chery Bets on the Traditional Powertrain

As the penetration rate of new energy vehicles in China surpasses 50%, claims that "fuel vehicles are about to become extinct" seem increasingly credible. However, data from the global market tells a different story.

On April 22, CHERY AUTO jointly with the China Automotive Technology and Research Center (CATARC) and five leading domestic universities including Tsinghua University and Tianjin University, officially released the "White Paper on Technological Transformation of New Fuel Vehicles in China," and announced the market launch of the new-generation Tiggo 9 equipped with advanced fuel vehicle technology.

While most automakers have been secretive about internal combustion engine R&D, quietly reducing or even freezing related budgets, Chery's high-profile investment is undoubtedly a counter-trend choice. The underlying logic is not complex: the global fuel vehicle market remains vast.

01 Breaking Through and Reconstructing

Today, as new energy penetration rates continue to cross new thresholds, the greatest crisis facing fuel vehicles is no longer simply their disadvantage in energy consumption, but the sense of gap caused by the lack of intelligent configuration.

The core intent of Chery's "White Paper on Technological Transformation of New Fuel Vehicles in China" is precisely to break the industry stereotype that "energy forms and intelligence are absolutely opposed."

Fuel vehicles have been frequently criticized in recent years primarily because the supply chain and automakers have exclusively tilted the most advanced infotainment systems, intelligent driving capabilities, and comfort configurations toward new energy products.

Zhang Guozhong, Vice President of Chery Group, believes that energy forms should not limit user experience.

This concept has been materialized into the "Oil-Electricity Equal Rights" strategy: consumers should not have to sacrifice intelligent and comfortable experiences when choosing fuel vehicles for their all-weather adaptability and freedom from charging anxiety. To support this philosophy, the technical team led by current CTO Xiao Feng has delivered a systematic plan to reconstruct the internal combustion engine technology system.

The core technologies disclosed in the White Paper directly address the core pain points of fuel vehicles. For instance, the latest generation Kunpeng Sky Engine, through frontier technological innovations such as "dual-curve triple-linkage," achieved a thermal efficiency of 48.57%, the highest globally, setting a new record for mass-produced internal combustion engines in publicly available data.

Another example addresses the shortcoming of fuel vehicles being unable to provide idling air conditioning and external power discharge. Chery globally debuted its HEV 5 kWh technology. It not only reduces traditional fuel consumption by approximately 30% but also achieves a peak power discharge of 150kW.

It is now an industry consensus that fuel vehicles also require intelligence. Leveraging the Mars Core MIND Full-Domain Fusion intelligent architecture, Chery has connected perception, decision-making, and execution in fuel vehicles.

Technology implementation requires a powerful product array for support. Currently, these technologies are mounted on the all-new Tiggo 9.

The Falcon 500 intelligent driving system, which has been tested to achieve 1,100 kilometers of zero takeover, along with highway NOA and large-scale deployment of L2+ level full-scenario intelligent driving, has torn off the historical label of traditional fuel vehicles being "not smart enough."

02 The Real Global Foundation

Stepping back from Chery's single-enterprise strategic perspective and examining the situation from the macro dimension of the global automotive industry in 2026, the status of fuel vehicles is far from the dire picture painted by domestic public opinion.

Admittedly, the market share of pure fuel vehicles in China has undergone structural contraction. However, industry forecasts for the future market suggest maintaining a "433" energy structure: 40% hybrid, 30% pure electric, and 30% pure fuel. A 30% proportion still corresponds to a massive absolute volume of tens of millions of units sold annually.

The automotive industry relies heavily on economies of scale.

In South America, the Middle East, Eastern Europe, and even parts of North America and Southeast Asia, pure electric vehicles cannot form scaled substitution over a long period due to weak grid infrastructure, frequent extreme climates, and vast geographical environments. Fuel vehicles remain the unshakable absolute necessity in these regions.

A senior industry practitioner told Wall Street News that for Chinese automotive brands to truly complete the leap from "regional players" to "global giants," internal combustion engine technology must not only be retained but also made world-leading. This is particularly critical for enterprises targeting the global market.

Reviewing the evolution path of fuel vehicles over the past decade or more clearly reveals their inevitable historical transition from single-dimension competition to multi-dimensional competition.

During the pure mechanical dominance phase, users' core demands were displacement, horsepower, smoothness, and the absolute reliability of the three major components. Overseas established automakers built solid technical moats based on century-long accumulation.

During the configuration stacking transition phase, emerging domestic brands initially attempted to establish differentiated advantages through large screens, leather materials, and basic connectivity, but their underlying electronic and electrical architectures remained outdated.

Now entering the deep integration phase of intelligent electric drive, i.e., the new fuel era. Fuel vehicles no longer reject electrification but actively integrate high-voltage systems, high-computing chips, and AI large models. The role of the engine has transformed from a single power source into a comprehensive energy hub combining efficient propulsion and intelligent power generation.

Consumer pain points are always the primary driver of industrial evolution; fuel vehicles must also keep pace with the times.

Chery's technological reshaping of fuel vehicles is also a response to the industry's "pure-electric-only" narrative.

The relationship between new energy and internal combustion engines need not be one of substitution. Globally, diverse energy pathways will coexist for the long term.

For Chinese automakers, leading in new energy is the core strategy. However, reconstructing internal combustion engines using electrification and AI technology, and competing head-on with international giants in the fuel vehicle market, is equally worth investing in.