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China’s auto exports grew significantly in 2025, rising 21% year-over-year to surpass 7 million vehicles, according to data released Wednesday by the China Association of Automobile Manufacturers. The surge was primarily fueled by new energy vehicles (NEVs), with exports of electric vehicles and plug-in hybrids doubling to 2.6 million units.
Chinese automakers have increasingly looked overseas as they face intense competition in their domestic market. This export push comes as domestic passenger car sales show signs of cooling, particularly evident in December’s 18% year-on-year sales drop despite an overall 6% annual growth to 24 million units for 2025.
“Chinese manufacturers are finding greater profitability and growth potential in international markets,” said Stephen Chan, an associate director at S&P Global Ratings. “While overseas markets currently contribute less than 10% of revenue for most Chinese automakers, we believe this contribution will likely rise over the next two years as exports expand.”
The primary export destinations remain Russia, Latin America, the Middle East, Europe, and Southeast Asia, which collectively accounted for approximately 70% of China’s auto export volume in 2025. However, Chinese manufacturers continue to face significant barriers in wealthier markets like the United States and Canada, where substantial tariffs on electric vehicles remain in place.
A recent development could further boost Chinese EV shipments to Europe. On Monday, China and the European Union announced an agreement to resolve their standoff over Chinese-made electric vehicles entering the European market. Cui Dongshu, general secretary of the China Passenger Car Association, projects that China’s EV exports to the EU will grow by roughly 20% annually between 2026 and 2028 following this breakthrough.
Deutsche Bank economists have estimated that China’s passenger vehicle exports will increase by 13% year-on-year in 2026, citing the relatively higher profitability of overseas markets for Chinese automakers.
The export growth comes at a crucial time for Chinese manufacturers. BYD, which surpassed Tesla to become the world’s largest EV maker in 2025, reported a concerning 18% year-on-year drop in December deliveries across all vehicle types, with just 420,398 units delivered. This decline signals the challenges facing even the market leaders in China’s domestic auto sector.
Paul Gong, head of China Autos Research at UBS, predicts that domestic passenger car sales in China will likely decrease in 2026. Contributing to this forecast is a shift in China’s subsidy structure for new passenger cars, which is transitioning from flat rates to a system based on vehicle prices. This change is expected to put additional pressure on sales of lower-priced vehicles.
The subsidy adjustment is particularly significant considering that more than half of China’s new passenger vehicle sales come from cars priced below 150,000 yuan ($21,510), according to S&P Global.
“To secure sales in this challenging environment, automakers could target improving product features or subsidizing consumers out of their own pockets,” S&P analysts noted in a recent report.
The contrasting trends between robust export growth and slowing domestic demand highlight the strategic importance of international markets for Chinese automakers going forward. As competition intensifies at home and government incentives for EV adoption diminish, the industry’s ability to capture overseas market share will likely become increasingly vital to sustaining growth.
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11 Comments
China’s auto export surge is an interesting development. I wonder how this will impact global trade dynamics in the automotive sector and what it means for competition between Chinese and other major automaking hubs.
Good point. The export growth could shake up global supply chains and competitive positioning in the auto industry. It will be important to monitor how this affects trade flows and market shares going forward.
This export surge could create new opportunities for Chinese automakers, but they’ll need to ensure their products can truly compete on the global stage in terms of quality, features, and brand reputation.
The shift towards exporting more vehicles, particularly NEVs, could create new opportunities for Chinese manufacturers. However, they will need to ensure quality and competitiveness to sustain growth in international markets long-term.
Interesting to see China’s car exports surge, especially in the NEV segment. This likely reflects the growing competitiveness of Chinese automakers as they expand globally and seek new markets beyond the domestic slowdown.
While the export surge is noteworthy, the slowdown in domestic demand is also an important consideration. Chinese automakers will need to carefully balance their global and local strategies to remain competitive on both fronts.
The rise in China’s car exports, especially for NEVs, demonstrates the country’s manufacturing capabilities and appetite to expand its automotive footprint globally. However, quality and brand reputation will be key to sustaining this momentum.
The export push is a smart move by Chinese carmakers facing intense competition at home. Diversifying into overseas markets can help offset any softening in domestic demand. It will be worth watching how this plays out over the next couple of years.
This export growth highlights China’s ambitions to become a major global automotive player. It will be fascinating to see how this unfolds and whether Chinese brands can make significant inroads in international markets.
China’s car export growth is an interesting development, but the overall picture seems mixed with domestic demand cooling. It will be crucial for manufacturers to maintain quality and competitiveness as they expand internationally.
Well said. The export success may be a double-edged sword if it comes at the expense of the domestic market. Striking the right balance will be critical for Chinese automakers going forward.