China floods the world with cars it can’t sell at home

The growth of electric vehicle sales in China is leading state-owned giants like SAIC and Dongfeng to target emerging markets for petrol car sales, writes Nick Carey from Warsaw, Poland

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China’s electric-vehicle industry captured half its domestic market in just a few years, crushing sales of petrol-powered vehicles from once-dominant global automakers.

But foreign players weren't the only losers. Many Chinese legacy automakers also watched their sales collapse — and responded by flooding the world with fossil-fuel vehicles they couldn’t sell at home.

While Western policymakers have focused on the threat of China's heavily subsidised EVs, protecting their markets with tariffs, US and European automakers face greater competition from China’s petrol-guzzlers in countries from Poland to South Africa to Uruguay.

Fossil-fuel vehicles have accounted for 76% of Chinese auto exports since 2020, and total annual shipments jumped from 1 million to likely more than 6.5 million this year, according to data from China-based consultancy Automobility.

The boom in petrol-powered exports is driven by the same EV subsidies and policies that wrecked the China businesses of automakers like Volkswagen, GM and Nissan by underwriting scores of Chinese EV makers and igniting a devastating price war, a Reuters examination found. The phenomenon highlights the far-reaching impacts of Chinese industrial policy, as foreign competitors struggle to keep pace with government-backed firms chasing Beijing’s goals to dominate critical sectors nationally and globally.

China's petrol-vehicle exports alone — excluding EVs and plugin hybrids —were enough last year to make it the world’s largest auto-exporting nation by volume, industry and government data show. This account of Chinese automakers’ global expansion is based on a Reuters review of auto-sales data in dozens of countries and interviews with more than 30 people, including executives from 11 Chinese and two Western automakers, distribution managers for Chinese brands and industry researchers.