China's car exports surged in 2025, but domestic demand slowed
[January 14, 2026] By
CHAN HO-HIM
HONG KONG (AP) — China’s auto exports surged 21% in 2025, driven by
rising shipments of electric vehicles, while domestic demand slowed, an
industry association said Wednesday.
Confronted with grueling competition in an overcrowded domestic market,
Chinese auto manufacturers have stepped up sales around the globe.
As they expanded further into overseas markets last year, exports of new
energy vehicles such as EVs and plug-in hybrids doubled from the
previous year to 2.6 million units, according to the China Association
of Automobile Manufacturers.
Overall vehicle exports from China passed 7 million units, up 21% from
the previous year.
Chinese car exports are expected to continue to grow this year, as its
automakers maneuver against an intensifying price war at home as demand
weakened.
In all of last year, passenger car sales in China rose 6% to 24 million
units. But sales in December fell 18% year-on-year. Automakers have
enjoyed help from government trade-in subsidies meant to encourage
people to switch to EVs, but demand has slowed recently as those
payments were curtailed.
Deutsche Bank recently estimated that China’s passenger vehicle exports
will increase 13% year-on-year in 2026. The bank's economists said in a
recent report that overseas markets offer relatively higher
profitability for Chinese automakers, on top of faster growth.
On Monday, China and the European Union said they had agreed on steps to
resolve a standoff over exports of China-made electric vehicles to the
bloc, a development that analysts say will likely fuel more Chinese EV
exports to Europe.
Cui Dongshu, the general secretary of the China Passenger Car
Association, another industry group, predicted that China’s EV exports
to the EU would rise by an average of around 20% each year between 2026
and 2028.
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Aerial view of new cars waiting for shipment at a port in Shanghai,
China, Wednesday, Jan. 14, 2026. (Chinatopix Via AP)
 Overseas markets currently
contribute less than 10% of revenue for most Chinese automakers,
though leading players like BYD see larger overseas revenue
contributions, said Stephen Chan, an associate director at S&P
Global Ratings. “We believe the (overseas) contribution will likely
rise over the next two years as exports expand,” he said.
Key export destinations will likely remain Russia,
Latin America, the Middle East, Europe and Southeast Asia, which
together accounted for roughly 70% of 2025 volumes, he said. Chinese
automakers face higher hurdles in wealthier markets, including the
U.S. and Canada, where steep tariffs on EVs prevail.
China's BYD surpassed Tesla as the world’s biggest EV maker in 2025.
However, in December, BYD reported just 420,398 deliveries for all
types of vehicles, down 18% from a year earlier.
Domestic passenger car sales will likely drop in 2026, said Paul
Gong, head of China Autos Research for the Swiss bank UBS.
China's subsidies for new passenger cars are changing this year from
flat rates to a system based on new car prices, adding to pressure
on sales of cheaper vehicles, according to analysts at S&P.
More than half of China’s new passenger vehicle sales come from cars
priced below 150,000 yuan ($21,510), S&P said in a recent report.
“To secure sales, they (automakers) could target improving product
features or subsiding consumers out of their own pockets,” its
analysts wrote.
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