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How China Became the World’s Largest Car Exporter

Published

1 year ago

November 29, 2024

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How China Became the World’s Largest Car Exporter

Source: Alix Partners

Note: 2024 values are estimated.

Just two decades ago, China had little capacity to make cars, and owning one was considered novel. Today, China produces and exports more cars than any other country in the world.

President-elect Donald J. Trump has promised to impose new tariffs on China. Many countries, including the United States, already levy extra tariffs on China’s electric vehicles. But with all of the advantages China wields in automaking, this pushback is unlikely to undercut China’s dominance.

China’s home market for car sales is the world’s largest — almost as big as the American and European markets combined.

As China’s domestic market grew, so did its production capacity, propelled by massive government investment and world-beating advances in automation. Yet in recent years, the pace of sales has fallen behind as consumer spending slows in China’s economic downturn. The result is that China today has the capacity to make nearly twice as many cars as its consumers need.

Source: GlobalData

Note: 2024 values are estimated.

To deal with the excess, China has increasingly looked overseas to sell cars.

China is a leader in the transition to electric vehicles and it exports more of them than any other country. Chinese brands like BYD are becoming known worldwide for offering advanced electric cars at the most competitive prices. And as Chinese drivers have shifted rapidly to electric vehicles, demand for gasoline-powered cars in China has plunged and many are being exported instead.

But China’s trading partners say that China’s exports of both electric and gasoline-powered cars imperil millions of jobs and threaten major companies. Earlier this year, the United States and the European Union put significant new tariffs on electric cars from China. Governments are concerned because the auto industry plays a big role in national security, producing tanks, armored personnel carriers, freight trucks and other vehicles.

What’s more, China has used steep tariffs and other taxes as a barrier to car imports, so that practically all of the cars sold in China are made in China.

Here’s how China took the lead in the global car market.

Decades of investment in electric cars pays off

Last year, China sold 1.7 million electric cars abroad, nearly 50 percent more than the next largest exporter, Germany. Since 2020, shipments have skyrocketed.

The top destination is Europe, where consumers prefer small, compact models like those sold in China.

Southeast Asia is another big market, where buyers increasingly prefer Chinese cars for their cheaper prices.

China also exports a small but fast-growing number of plug-in hybrid cars. Hybrids are particularly popular among buyers who may not have access to extensive charging networks but still want electric cars for short trips.

China has invested heavily for more than 15 years in developing electric cars, to limit its dependence on imported oil. Wen Jiabao, China’s premier from 2003 to 2013, made electric cars one of his highest priorities. In 2007, he reached outside the Communist Party to choose Wan Gang, a Shanghai-born former Audi engineer in Germany, as the country’s minister of science and technology. Mr. Wen gave him essentially a blank check to make China the world’s leader in electric cars.

Now, half of China’s car buyers choose battery electric or plug-in hybrid cars. Until recently, buyers of electric cars also received large subsidies from the government. Carmakers have received low-interest-rate loans from state-controlled banks to build dozens of factories, as well as government tax breaks and cheap land and electricity. By one estimate, Beijing’s assistance to China’s electric car and battery sectors has been worth more than $230 billion since 2009 — one reason that the European Union has imposed anti-subsidy tariffs.

China is projected to continue its heavy investment and retain its lead in electric vehicles.

Unloading excess gasoline cars at steep discounts

Because of the shift to electric cars in China, carmakers have been left to slash prices on unwanted gasoline cars and unload them overseas. Last year, most of the cars China sold abroad were traditional gasoline engine cars.

Russia was the leading destination last year. Sales surged after the Ukraine invasion, partly because of the departure of Western brands from the Russian market.

China’s gasoline cars were also favored by middle- and lower-income countries in Latin America and the Middle East for being cost-effective.

China has more than 100 factories with a combined capacity to build close to 40 million internal combustion engine cars a year. That is more than twice as many as people in China want to buy, and sales of these cars are dropping fast as electric vehicles become more popular.

As a result, some assembly plants have been mothballed or shuttered. But automakers, reluctant to close facilities, are selling many gasoline-burning cars overseas at steep discounts.

Will tariffs be able to slow China down?

The flood of Chinese cars into the global market has raised alarms around the world. In addition to the European Union, governments elsewhere have levied extra tariffs on electric cars from China, on top of baseline taxes already applied to all imported vehicles.

Additional tariffs levied on Chinese electric cars in major world markets

Note: Chart does not show baseline taxes or favored rates dependent on manufacturer or other compliance. India and Brazil levy tariffs on imported electric cars from all countries. Turkey levies the same tariff on all cars from China.

The countries’ tariffs come in different forms. The U.S. government levied a flat tax. The European Union calculated a rate for each automaker based on the estimated subsidies the company has received from Chinese government agencies and state-controlled banks. India and Brazil are also aiming to protect their local industries.

But tariffs may not fully offset Chinese carmakers’ competitive lead. Chinese companies offer cars with similar quality to their global rivals and at lower cost. Analysts at the bank UBS calculate that cars made by BYD cost 30 percent less to assemble than similar cars made by Western companies. Some of the biggest savings for Chinese companies are on batteries. China controls practically the entire supply chain for making electric car batteries.

Production costs are much lower in China

Source: UBS

Note: Models compared are of similar size and function. Prices are in U.S. dollars, for models from 2021.

With the advantages China wields in automaking, even the world’s intensifying pushback is unlikely to stop the country from dominating the industry for many years to come.

BYD electric cars stacked for loading onto a ship for export at Taicang Port in Suzhou.

Agence France-Presse — Getty Images

Related Topics:Automobiles china Customs (Tariff)Electric and Hybrid Vehicles Featured

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Business

Video: Can You Rely on A.I. to Translate Love?

Published

10 hours ago

February 14, 2026

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Video: Can You Rely on A.I. to Translate Love?

new video loaded: Can You Rely on A.I. to Translate Love?

A.I. translation has become a huge industry, but how accurate is it? Our tech reporter, Kashmir Hill, explores its successes and failures through a couple who relies on of A.I. translation to communicate.

By Kashmir Hill, Gilad Thaler, Kassie Bracken, Jon Miller, Jon Hazell and Joey Sendaydiego

February 14, 2026

Business

Parents who blame Snapchat for their children’s deaths protest outside company’s headquarters

Published

12 hours ago

February 14, 2026

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Parents who blame Snapchat for their children’s deaths protest outside company’s headquarters

Standing in front of Snap’s Santa Monica offices, parents clutched photos of their children who died from taking fentanyl-laced pills facilitated through the disappearing messages of the Snapchat app.

They rolled white paint onto the ground, spelling out the names of 108 children who died from alleged social media harms.

“Snapchat: Protect kids not predators,” a banner read.

Yellow signs with images of dead children accused the company of being an “accomplice” to “murder,” videos and photos of the demonstration showed.

More than 40 parents attended Thursday’s protest, an event organized by Heat Initiative, an advocacy group that focuses on holding tech companies accountable if they fail to protect kids online.

“For years, families have watched their children die from fentanyl poisoning and sexual exploitation facilitated by Snapchat’s design—and for years, Snapchat has fought to avoid any meaningful accountability,” Sarah Gardner, chief executive of Heat Initiative, said in a statement.

The demonstration highlighted the mounting pressure social media companies such as Snap continue to face as a landmark trial in Los Angeles over whether tech companies such as Instagram and YouTube can be held liable for allegedly promoting a harmful product and addicting users to their platforms continues in Los Angeles.

TikTok and Snap, the parent company of messaging app Snapchat, settled for undisclosed sums to avoid the trial.

Parents who allege the Santa Monica company is responsible for drug sales facilitated through the app have also sued Snap. Parents who attended this week’s protest urged the company to do more to safeguard young people from predators and called for Snap to disable its AI chatbot.

Social media companies have faced allegations for years that their platforms are designed to be addictive and make it easy for predators and drug dealers to target and harm young people. Parents who have lost their children have also pushed for more legislation, including in California, to make social media platforms safer.

The rise of artificial intelligence chatbots, which are also incorporated within apps such as Snapchat and Instagram, have also raised more safety concerns because young people who have died by suicide have spilled some of their darkest thoughts online.

Snap said in a statement that the company has invested in online safety, including efforts to combat illegal drug sales on its platform. The company pointed to the technology it uses to detect illegal drug content, its work with law enforcement and education initiatives. This week, Snap was among the companies that agreed to get evaluated on their child safety efforts.

“Snap unequivocally condemns the criminal conduct of the drug dealers whose actions led to these tragedies. Addressing the fentanyl crisis demands a united front, bringing together law enforcement, government officials, medical professionals, parents, educators, tech companies, and advocacy organizations,” a company spokesperson said in a statement.

Amy Neville, an Orange County mom who lost her 14-year-old son Alexander Neville from fentanyl poisoning after he obtained drugs through Snapchat, said in a statement that parents have testified before Congress, held rallies and brought the deaths to Snap’s doorsteps for years.

“We are painting our children’s names in the street and bringing this memorial to his doorstep because Evan Spiegel won’t acknowledge what his platform has taken from us,” she said in a statement.

Spiegel is the chief executive and co-founder of Snap.

On Friday, parents also gathered at the Gloria Molina Grand Park in Los Angeles to honor children who they say died because of social media harms. They unveiled the “Lost Screen Memorial,” displaying large smartphones with the images of 50 dead children.

“Their faces serve as a constant reminder of what has been lost. The responsibility to keep children safe online should not lie with parents alone,” the website for the memorial said.

Business

Rivian finds a way to shine even as the EV market struggles in the dark

Published

24 hours ago

February 13, 2026

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Rivian finds a way to shine even as the EV market struggles in the dark

Rivian shocked the market with strong earnings results, proving itself an outlier in the electric vehicle market, which has been struggling with the end of government subsidies and cooling consumer excitement.

The shares of the Irvine-based high-end EV manufacturer skyrocketed 27% on Friday after it announced stronger-than-expected results, indicating that, after years of struggling with losses, it may have at last found a path to profitability.

On Thursday, Rivian reported gross profits for 2025 of $144 million, compared with a net loss in 2024 of $1.2 billion.

In its earnings release, Rivian credited the swing to gross profit to “strong software and services performance, higher average selling prices, and reductions in cost per vehicle.”

Last October, it laid off roughly 600 employees, more than 4% of its workforce.

Rivian delivered 42,247 vehicles in 2025 and produced 42,284 vehicles. The company still reported a $432-million net loss for the year for automotive profits, an improvement from 2024.

“It’s a turnaround for the ages,” said Dan Ives, an analyst with Wedbush Securities. “The past few years have been very frustrating for investors.”

Rivian was founded in Florida in 2009 and made its initial public offering in 2021. It competes with Tesla and other automakers selling all-electric vehicles for a premium price.

Following the expiration in September of the $7,500 federal tax credit for new electric vehicles, companies have been under pressure to offer lower sticker prices. Last year, Tesla launched new variations of the Model 3 and Model Y that start at roughly $5,000 less than the more expensive versions of the same models.

Investors said the discounts weren’t enough and the vehicles, still priced above $35,000, remained out of reach for many consumers. There are only a handful of EVs on the market available for under $35,000.

Rivian is banking its future on the success of its own lower-priced R2 model, which is expected to start around $45,000 with deliveries slated to begin this spring.

The least expensive Rivian model available now, the R1T pickup truck, starts at $72,990.

The company has received positive early feedback on its R2 SUV, according to the earnings release.

“It’s incredibly exciting to see the early strong reviews of the R2 pre-production builds, and we can’t wait to get them to our customers next quarter,” Rivian founder and chief executive, RJ Scaringe, said in a statement.

Ives said the popularity of the R2 will be pivotal for Rivian, which laid off nearly 1,000 workers in 2025.

“It’s going to be the epicenter of their success or challenges,” Ives said.

Rivian shares have risen more than 33% over the last year but are down 8% since the start of 2026.

“They’re back on their flight path with still some turbulence in the air,” Ives said. “