The domestic substitution rate of diesel generators has exceeded 30%!

Chinese companies are achieving a strong breakthrough, with the domestic substitution rate rapidly increasing from almost zero to over 30%.

Currently, the market supply side is characterized by "high barriers to entry and a continuously widening supply-demand gap." Cummins, a leading overseas company, released an industry forecast stating that the global data center generator market will experience sustained growth, with the market size steadily increasing from $6 billion in 2023 to $9 billion in 2026, and further climbing to $12 billion by 2030, representing considerable growth potential. Caterpillar's sales in this segment reached $8.4 billion in the third quarter of 2025, a year-on-year increase of 17%, with data center power supplies being the core growth engine.

Amid this wave of rapid market expansion, the overseas supply chain has already shown significant signs of strain.

In a report, Huang Xili, an analyst at Dongwu Securities, pointed out that there are only six mainstream global suppliers, and foreign companies have an expansion cycle of 1-2 years. Supply growth is far lower than the 40% demand growth rate. From 2027 to 2030, global data center capacity demand will exceed supply by 500%, and the shortage will continue for a long time. He predicted: "Breakthroughs in AI technology have driven a significant increase in capital expenditure by global cloud computing service providers. The domestic diesel generator market size is expected to reach 12.5 billion yuan in 2025, a year-on-year increase of 53%, with a compound annual growth rate of 22% from 2024 to 2028. Meanwhile, foreign manufacturers are cautious in expanding production, and their order backlog extends to 2026, providing an excellent window of opportunity for domestic manufacturers to substitute."

Against this backdrop, Chinese companies have achieved a strong breakthrough, with the domestic substitution rate rapidly increasing from almost zero to over 30%. Leading companies such as Weichai Power and Yuchai International have become core forces in the market by leveraging their technological breakthroughs and production capacity advantages. Weichai's sales of data center-specific engines surged 491% year-on-year in 2025, while Yuchai, through its Vietnam factory, expanded into the Southeast Asian market, with overseas sales increasing by over 50% year-on-year from January to November 2025.

Fabricio Moz, Vice General Manager of Weichai Group and CEO of Baudouin, told a reporter from China Industry News, "Weichai Baudouin is confident and capable of becoming the fifth core manufacturer to enter the field of high-power data center products." This confidence stems from Weichai Group's R&D investment of over 30 billion yuan in the past five years, as well as the deep integration of Chinese and French technical teams.

The export market also performed exceptionally well. Data from the China Internal Combustion Engine Industry Association shows that from January to November 2025, China's generator set exports reached US$6.042 billion, a year-on-year increase of 24.98%, significantly outperforming the overall growth rate of the internal combustion engine industry (11.31%), becoming the core driving force for the industry's exports. Huang Xili told a reporter from China Industry News, "Domestic manufacturers have significant advantages in expansion speed, price, and response efficiency. Their product prices are 10%-20% lower than foreign manufacturers, and they are deeply adapted to the scheduling needs of domestic AI data centers. It is expected that the domestic substitution rate will increase to over 50% in the next 3-5 years."

Industry insiders believe that the core competitiveness of domestic manufacturers is concentrated in three aspects: delivery cycle is only half that of international manufacturers, with some standard models delivered within one month; prices are 15%-30% lower than international brands, and maintenance costs are reduced by more than 20%; and they can deeply cooperate with AI scheduling systems to optimize load distribution, with stronger technical adaptability. At the same time, policies have also provided strong support. The "Eastern Data, Western Computing" strategy has spurred a large amount of construction demand, and R&D subsidies and tax incentives for high-end equipment manufacturing have further safeguarded the rise of domestic enterprises.

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