China set to take on world in electric car sales as exports surge 

China’s dominance of EV battery and materials supplies has allowed domestic vehicle markets to ramp up production.

Vehicle exports from China have surged this year as domestic carmakers look to establish themselves beyond their home market.

Through to September, a total of 2.2m passenger cars, trucks, buses, and other vehicles were exported from China. The figure is up 54% from the same period last year and already more than double the average from 2012 to 2020.

Electric vehicles are the biggest contributor to the surge, with 342,000 passenger EVs exported in the first three quarters of the year.

That is 29% of all vehicle exports in this segment and a big increase from 2019, when EVs accounted for just 2% of exports.

Another 314,000 low-speed EVs and 4,000 electric buses also were exported.

There are several factors driving China’s EV export growth.

Its dominance of EV battery and materials supplies has allowed domestic auto markets to ramp up production.

Western vehicle-makers are using the country’s lower production costs and established supply chain to churn out EVs for customers around the globe as interest in the technology takes off.

Major exporter

Tesla emerged as a major exporter from its factory in Shanghai, starting last year. It has shipped almost 165,000 vehicles from the plant to international markets in the first nine months of this year.

Other global carmakers including Renault and BMW also are exporting Chinese-made EVs, and Volkswagen will start doing so next year.

Chinese domestic brands make up the balance. SAIC saw its EV exports jump to 78,000 vehicles in the first three quarters, mostly with the MG brand that it acquired in 2007.

Rival BYD exported 22,000 vehicles and plans to do a lot more volume in 2023 as it continues to enter new markets. Companies including Xpeng, Nio, and Great Wall also have announced big expansion plans.

That is starting to show up in the EV sales figures in other countries. 

Of the 1.8m EVs sold in Europe in the first three quarters of this year, 11% came from Chinese carmakers, up from 2% in 2020.

It is worth reflecting on how we got here. For much of the last decade, there has been heated discussion about whether Chinese automakers could establish themselves on the global stage. That talk felt somewhat abstract when Chinese automakers were not even dominating their home market.

In 2015, 66% of all vehicle sales in China were from joint ventures between international and domestic brands. Entering Germany or the US seemed like quite a leap.

China has been building up its EV industry through government fleet-purchasing requirements, subsidies, supply-side incentives, and extensive investments in charging infrastructure.

• Bloomberg