Shanghai, the financial and commercial hub of China, is pinning its economic hopes on emerging industries such as autonomous driving and solid-state electric vehicle (EV) batteries to sustain growth following a robust start in 2026. Shanghai Mayor Gong Zheng said the city remained confident about achieving a 5% economic expansion this year, buoyed by a strategy to attract foreign businesses and bolster local tech innovations. “We will double efforts to enlarge investment in key projects, taking advantage of their role in driving technological innovations,” Gong said at a press conference. “We aim to eventually revitalize industries, improve efficiency in urban renewal and enhance people’s living standards.”
Shanghai – home to SAIC Motor, one of China’s largest state-owned carmakers, and to Tesla’s wholly-owned Gigafactory – has been aggressively pursuing the development of self-driving technology over the past two years. In July, Nasdaq-listed Pony AI received a permit to operate commercial robotaxis in Shanghai’s Pudong New Area, allowing it to charge fares, and in February, Pony AI announced mass production of a robotaxi co-developed with Japanese carmaker Toyota. Pony AI initially operated its fleet in Shanghai’s Jinqiao and Huamu areas, covering a combined area of 40 sq km on a trial basis. The testing zone would be gradually expanded to other parts of Pudong, China’s 1,400 sq km pioneer zone.
The city is also banking on solid-state batteries. The technology, which uses a solid electrolyte rather than the liquid or gel-based materials found in conventional lithium-ion cells, is widely viewed as the industry’s next frontier. Analysts say the technology promises higher energy density, improved safety and longer driving ranges. In mid-2025, Shanghai announced that Toyota would start building pure electric vehicles from 2027 at a wholly-owned plant in Jinshan district.
The project is part of a concerted effort by local authorities to reclaim the “Motown” crown from Shenzhen and Guangzhou, which have eclipsed Shanghai in automotive output since 2022. Shanghai’s municipal government also announced that other sectors, ranging from humanoid robots and shipbuilding to renewable energy, would serve as new growth engines. These emerging sectors are likely to generate an additional industrial output of CNY1 trillion over the next five years, Tang Wenkan, Director of the Shanghai Commission of Economy and Information Technology, said at the press conference. Shanghai reported a 5.4% increase in economic output in 2025, outpacing the national growth of 5%, the South China Morning Post reports.
