Nearly three-quarters of China’s foreign car sales are the old-fashioned internal combustion ones. Innovative EVs eventually may play a bigger role in exports.
The No. 2 economy surpassed Japan in the first half of 2023. Full-year exports should exceed four million vehicles, up from one million or so prepandemic, says Paul Gong, China auto analyst at UBS.
Is this evidence that rumors of China’s economic death are exaggerated? Yes and no. China makes more electric vehicles than the rest of the world combined, with improving quality. That’s not what’s driving the export boom, though. About 70% of the foreign sales are old-fashioned internal combustion cars, Gong says. State-owned SAIC Motor and Chery are the leading exporting companies. Of the EV exports, U.S.-owned Tesla accounts for nearly 40%.
Innovative EVs may play a bigger role in China’s export engine as it keeps rolling. Annual vehicle exports could reach nine million by 2030, consultancy AlixPartners predicts. China’s emerging EV champion, BYD , has barely begun to focus on exports, because its cars are selling like hot cakes at home. The company’s domestic market share has soared to 37%, Russo reports. That’s four times Tesla’s, and leaves competitors like Li Auto , XPeng , and Nio in the dust, for the moment.
He’s looking instead into China’s EV supply chain for companies with more defensible market niches and less potential to raise protectionist hackles abroad. One example is Wuxi Lead Intelligent Equipment , a contract manufacturer for Chinese battery giant Contemporary Amperex Technology, or CATL , but also a budding partner for would-be European battery champion Northvolt.
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