Great concerns have been raised on the driving cycle due to its critical importance in vehicle design, energy management strategy, and energy consumption forecast of new energy vehicles. Taking Xi'an city as a case, a novel method of driving cycle development for battery electric vehicles is proposed in this paper. First, the chase car method and on-board measurement method are combined to collect sufficient real driving data, which are randomly divided into two parts for developing and validating the target cycle. Then the nonlinear dimension reduction of characteristic parameters with respect to the micro-trips is achieved by employing kernel principal component analysis, and an improved clustering method is developed for constructing candidate cycles, in which the K-means clustering algorithm is applied in the training of random forest. The target cycle is selected from the candidate cycles by determining the assessment criteria with consideration of the characteristic parameters and the speed-acceleration distribution probability. Finally, a comparative study of different methods is implemented to illustrate the effectiveness of the proposed method. The typicality of the target cycle is revealed by analyzing the discrepancies between the target cycle and other legislative cycles.