China's Vehicle Export Surge: Navigating Trade Barriers

China's vehicle exports are set to grow modestly at 5.8% to 6.2 million units this year, following significant growth in 2024. While domestic sales rise, electric vehicle exports have declined due to European tariffs, prompting China to shift focus to hybrid exports.

China's vehicle exports are projected to increase by 5.8% this year, down from a robust 19.3% rise in 2024, according to data from the China Association of Automobile Manufacturers (CAAM). This slowdown reflects challenges amid rising European tariffs and shifting export strategies.

While overall vehicle sales in China are expected to see a modest 4.7% increase, electric vehicle exports have taken a hit, declining 10.4% against a backdrop of new tariffs imposed by the European Union. In response, Chinese automakers are boosting hybrid vehicle exports as a strategic pivot.

Supportive policies, such as continued auto trade-in subsidies, are crucial for sustaining growth in the domestic market, despite mounting competition and external pressures. Last year, over 6.6 million cars in China benefitted from government incentives, underscoring their importance in buoying the auto sector.

(With inputs from agencies.)