According to a report from the Financial Times, China’s automobile exports are projected to reach a new record this year. Industry analysts and trade groups forecast that exports could increase by 25% year-on-year, surpassing 7 million units for the first time. This growth is largely driven by declining domestic demand for traditional internal combustion engine vehicles and a slowdown in electric vehicle (EV) sales growth, leading automakers to redirect surplus production capacity to overseas markets.

UBS analysis indicates that exports of Chinese fuel-powered vehicles are expected to rise by 4% to around 3.4 million units this year, while EV exports are forecast to surge by more than 50% to approximately 3.7 million units. Key export markets include Mexico, the Middle East, Russia, and several European countries. Despite rising tariffs and trade barriers, Chinese automakers are accelerating efforts to establish overseas production facilities and sales networks. However, access to the U.S. market remains largely restricted due to high tariffs and national security concerns.

The China Passenger Car Association notes that the export growth is primarily being driven by EV manufacturers such as BYD. UBS also highlights that overseas sales already account for about 20% of the Chinese auto industry’s revenue and nearly half of its profits. As domestic subsidies phase out and competition intensifies, expanding into international markets has become crucial for Chinese automakers to sustain growth and maintain profitability.