How can Chinese manufacturing lead the recovery in 2025 as the global heat pump market undergoes a deep adjustment?

In 2024, the global air source heat pump market experienced a profound cyclical adjustment. According to Industry Online data, the global production and sales scale has declined year-on-year. However, the gloom is dissipating. As the industry inventory cycle comes to an end, energy prices stabilize, and policies in various countries become clearer, the global market is expected to experience a recovery in 2025. In this global competition for green transformation, China’s heat pump industry, which has already accounted for more than half of global production, is facing new opportunities and challenges.

1.Global market differentiation: policies become key variables

The market performance of different countries and regions shows significant differences, and the core driving force behind this is the policy strength of local governments.

1.1 North American Market: Policy Driven Growth

North American countries such as the United States and Canada are rapidly expanding their markets under policies such as government subsidies for clean energy equipment. In 2024, North America is one of the few regions to achieve positive sales growth. Despite the uncertainty of future policies, its growth momentum has been preliminarily established.

1.2 European market: short-term pressure, long-term optimism

Europe used to be an important market for global heat pump consumption, but in 2024, demand will temporarily be affected by multiple factors such as the economy, electricity prices, and changes in some countries’ subsidy policies. However, the EU has already listed heat pumps as one of the four key technologies for achieving carbon neutrality. Short term fluctuations have not changed long-term transformation determination, and European countries are increasing their investment in local industrial chains to accumulate strength for future recovery.

1.3 Asian market: led by China, looking forward to recovery

Asia is the world’s largest region for the production and consumption of heat pumps, with the Chinese market playing a crucial role. In 2024, due to factors such as the adjustment of the real estate market, domestic demand in China is facing short-term pressure. But with the implementation of strong national policies such as the Action Plan for Promoting High Quality Development of the Heat Pump Industry, the domestic demand market is expected to gradually recover, which is expected to drive the Asian market.

2.Opportunities for Chinese industries: from a “manufacturing powerhouse” to a “technological powerhouse”

China is the country with the most complete heat pump industry chain in the world, accounting for approximately 58% of global production. To lead the recovery, Chinese companies need to consolidate and expand their advantages in the following areas.

2.1 Utilize the advantages of scale and industrial chain

China has a complete supply chain from core components to complete machine manufacturing, which makes Chinese products globally competitive in cost control and delivery efficiency. Even in the European market, Chinese products still hold a significant share. Consolidating this advantage is the fundamental basis for Chinese manufacturing to firmly occupy the global market.

2.2 Breakthrough the high-end market through technological innovation

The competition in the future is not only about cost, but also about technology. The research and development direction of Chinese enterprises is aligning with the international forefront:

• High temperature industrial heat pump: Breakthroughs have been made in high-temperature steam supply technology below 200 degrees Celsius, which can be applied in complex industrial fields such as brewing and chemical engineering.
• Environmentally friendly refrigerant technology: Actively developing heat pump products using natural working fluids such as carbon dioxide (CO ₂) to reduce environmental impact and break through environmental barriers in the international market.
• Integrated system solution: Leading enterprises are transforming from equipment suppliers to system integration service providers, providing smart energy solutions for industrial parks and large buildings with “hot and cold combined supply”.

Chinese heat pump manufacturing

3.Future Outlook: Grasping Certainty in Fluctuations

Despite the uncertainty in the global economy, the long-term certainty of the development of the heat pump industry is very clear.

3.1 Certainty of Green Transformation

Whether it is Europe’s carbon neutrality goal or China’s “dual carbon” strategy, the trend of major global economies shifting towards green and low-carbon energy is irreversible. As an efficient alternative to direct combustion of fossil fuels, the core value of heat pumps will continue to be highlighted.

3.2 Certainty of Energy Efficiency Upgrade

The energy efficiency requirements for energy consuming equipment are becoming increasingly stringent worldwide. The Action Plan also clearly sets the goal of improving the energy efficiency level of products. This means that products with higher energy efficiency and smarter control technology will stand out in future market competition.

For Chinese heat pump companies, the current period is a crucial time to hone their internal skills and deepen innovation. By combining strong manufacturing capabilities with cutting-edge intelligent and low-carbon technologies, China can not only provide high-quality products for the global market, but also have the potential to export advanced “zero carbon” heating solutions, truly growing from a participant in the industry to a leader in global green transformation.