Not just a cheap ride: Chinese EVs come bearing gifts

In a little over 15 years, China has built the world's largest electric vehicle (EV) industry, enabled by government policy. It now produces about 70 per cent of all EVs worldwide and generates roughly two-thirds of sales, far more than any other economy.

- Mark Greeven

But the boom in production is turning into a glut. Domestic demand, weakened by the property slump and low consumer confidence, is struggling to absorb the industry's excess capacity. Beijing calls this destructive cycle "involution", where oversupply fuels fierce price competition, eroding profits and adding to deflationary pressure at home.

It also stokes trade tensions abroad. With the domestic EV market approaching saturation, Chinese carmakers including BYD, SAIC Motors and Geely are looking overseas to keep sales humming.

The world's second-largest economy exported 4.3 million vehicles in the first eight months of 2025, including 1.5 million EVs. That is up from one million total car exports in 2020. China's global share of EV exports, at 40 per cent, is the largest in the world.

This has drawn scrutiny in Western capitals, where officials argue that carmakers are exporting to offset excess capacity, and selling at prices that undercut local manufacturers.

With the US and EU slapping steep new tariffs on Chinese EVs - and Canada and Mexico following suit - Southeast Asia is now a key market for Chinese carmakers. China is shifting more EV exports to the region, where sales are growing and entry barriers are lower than in the West. Brands such as BYD and Chery are pushing into Thailand, Indonesia, Malaysia, the Philippines and Vietnam, as well as Singapore.

Japanese automakers such as Toyota and Honda have long held the lion's share of car sales in Southeast Asia, though their grip is now being challenged. BYD leapfrogged Toyota to become the top-selling car brand in Singapore in 2024.

NOT JUST A PRICE GAME