This working paper assesses technology progress and new developments in hybrid and electric vehicles in China. Joint ventures, especially with Japanese automakers, dominate China’s hybrid electric vehicle market. However, some independent domestic manufacturers have already made significant progress on full hybrid system development. Another promising direction is 48V mild hybrid systems. These systems achieve additional cost reductions by staying below the lethal limit of about 60V, without significant reductions in efficiency compared with higher voltage mild hybrids.