China Auto Exports Surge as EV Sales Climb

China’s passenger car exports rose sharply in May, increasing 73% year-on-year to around 809,000 vehicles. The export volume also edged higher than April’s level of about 796,000 passenger cars, underscoring continued strength in overseas demand. Passenger car makers are sending more vehicles abroad as they seek growth outside a softer domestic market.

New energy vehicles played a central role in this expansion. Exports of pure electric vehicles and plug-in hybrids more than doubled from a year earlier to about 435,000 units in May. These vehicles accounted for more than half of total passenger car exports, highlighting the prominence of electrified models in China’s outbound shipments.

The export gains contrasted with a downturn at home. Domestic passenger car sales in China fell more than 23% year-on-year in May to 1.4 million vehicles. This marked the seventh consecutive month of year-on-year declines in domestic passenger car demand.

The divergence between overseas and local markets is shaping automakers’ strategies. With domestic sales under pressure, manufacturers are increasingly leaning on exports, particularly of electric and plug-in hybrid vehicles, to sustain production volumes and market share.

BYD (1211.HK) has emerged as a leading beneficiary of the export boom. The company sold over 160,000 vehicles abroad in May, an increase of 80% from a year earlier. This reflects rapid acceptance of its lineup in overseas markets targeted across multiple regions.

BYD (1211.HK) aims to sell 1.5 million vehicles overseas this year, up from 1.05 million last year. The company’s expansion strategy is aligned with the broader industry shift toward international markets, as Chinese brands seek to capitalize on foreign demand for electric and hybrid models.

Analysts expect China’s passenger car exports to maintain strong momentum into 2026. Forecasts call for year-on-year export growth in the range of 30% to 50%, suggesting continued reliance on international markets for incremental volume.

Global trends in electrification are providing a supportive backdrop. The International Energy Agency projects that electric vehicle sales could reach 23 million in 2026 and account for nearly 30% of all cars sold that year. Rising interest in EVs, against a backdrop of higher gasoline and diesel prices linked to the war in Iran, is contributing to robust demand for the types of vehicles that China is exporting in increasing numbers.