China’s auto exports surged in 2025 even as domestic demand cooled, according to industry figures cited Wednesday, underscoring how Chinese manufacturers are increasingly leaning on overseas sales amid a competitive squeeze at home.
The China Association of Automobile Manufacturers said China’s auto exports rose 21% last year to more than 7 million vehicles, with shipments of electric vehicles and plug-in hybrids helping drive the increase. The association said exports of “new energy vehicles,” including EVs and plug-in hybrids, doubled from the previous year to 2.6 million units as Chinese automakers expanded further into overseas markets.
The industry data also pointed to a split between export momentum and the domestic sales picture. Passenger car sales in China rose 6% to 24 million vehicles over all of 2025, but sales fell 18% year-on-year in December, reflecting weaker demand late in the year after a period of support for consumers.
The slowdown has been linked to government trade-in subsidies used to encourage consumers to switch to EVs, which analysts said were curtailed. With the domestic market crowded and competition “grueling,” the industry figures described Chinese auto makers as responding by pushing harder for sales abroad while coping with intensifying price competition at home.
In 2026, Deutsche Bank estimated that China’s passenger vehicle exports will increase 13% year-on-year, with analysts saying overseas markets offer relatively higher profitability for Chinese automakers on top of faster growth. UBS analysts also said domestic passenger car sales are likely to drop in 2026, citing shifting subsidy rules that are changing how automakers market cheaper models.
China’s subsidies for new passenger cars are changing this year from flat rates to a system based on new car prices, which analysts at S&P said would add pressure on sales of cheaper vehicles. S&P also said that more than half of China’s new passenger vehicle sales come from cars priced below 150,000 yuan ($21,510), and its analysts wrote that to secure sales automakers could target improving product features or subsidize consumers out of their own pockets.
Europe remains a key battleground for Chinese EVs as tariffs and trade disputes shape market access. 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 analysts said will likely fuel more Chinese EV exports to Europe.
Cui Dongshu, general secretary of the China Passenger Car Association, predicted that China’s EV exports to the EU would rise by an average of around 20% each year between 2026 and 2028. Stephen Chan, an associate director at S&P Global Ratings, said overseas markets currently account for less than 10% of revenue for most Chinese automakers, while noting that leading players such as BYD see larger overseas revenue contributions and that the overseas share is expected to rise as exports expand.
Chan said key export destinations are likely to remain Russia, Latin America, the Middle East, Europe and Southeast Asia, which together accounted for roughly 70% of 2025 volumes. He also said hurdles in wealthier markets—where steep tariffs on EVs prevail—are higher, and cited the United States and Canada as examples.
Sales trends for major manufacturers reflect the market tension. The report said BYD surpassed Tesla as the world’s biggest EV maker in 2025, but BYD reported 420,398 deliveries for all types of vehicles in December, down 18% from a year earlier. The domestic demand cooling and subsidy shifts discussed by analysts suggest the pressure is likely to persist even as exports continue to grow, the industry figures said.