Chinese EV exports surge as carmakers look offshore

Export growth offsets softer local sales

Chinese vehicle exports surged in May, helping offset softer domestic sales and highlighting the growing global push by Chinese electric vehicle makers.

China’s vehicle exports rose 69% over the year in May, with exports of battery electric vehicles and plug-in hybrid electric vehicles lifting110%, according to China Association of Automobile Manufacturers figures.

Non-EV exports also rose strongly, up 43% over the year.

That means electric vehicles made up about half of China’s vehicle exports in May, compared with about 40% over the past year.

Why are domestic EV sales weaker?

Meanwhile China’s domestic electric vehicle market has softened, with new-energy vehicle sales down 4% in May, according to the industry figures.

Commonwealth Bank Sustainable and Energy Economist John Oh says the decline was linked to the phase-out of purchase-tax exemptions and less favourable trade-in subsidy rules, rather than a broader drop in demand for electric vehicles.

Even so, the lift in exports meant total vehicle sales (i.e. domestic sales and exports) were only down 2.1% on an annual basis in May.

Overseas markets stay in focus

Strong export growth means Chinese EV makers are likely to keep focusing on overseas markets, Oh says.

“Given the demonstrated ability for cost-competitive Chinese EV brands to take market share in export markets, the impact of higher EV exports on transport oil consumption will be worth watching over the next 12 to 18 months,” he says.

That push is already showing up in Australia, where Chinese brands have taken a much larger share of the electric vehicle market.

Australian EV sales made up 29% of new vehicle sales in May, helped by a 257% surge in Chinese brand sales. Chinese brands now account for 57% of Australia’s EV market, up from 33% in May last year, according to Commonwealth Bank analysis of data from the Federal Chamber of Automotive Industries, the Electric Vehicle Council and individual manufacturers.

Oh says the shift shows lower-cost Chinese EVs can help lift demand, even without new demand-side policy incentives.

Could electric trucks be next?

Oh says Chinese EV exports could also accelerate outside passenger vehicles, including in commercial transport.

“It’s worth noting the potential for Chinese EV exports to accelerate adoption in growing outside of passenger segments too,” Oh says.

He says there is growing evidence electric trucks can be economically viable compared with diesel trucks.

But heavy electric trucks are likely to face limits in Australia in the near term, with charging infrastructure still a key barrier.

That could constrain opportunities to reduce diesel use in heavy freight, even as lower-cost electric options become more competitive.