China's car exports surged in 2025, but domestic demand slowed

Core Insights - China's auto exports increased by 21% in 2025, primarily driven by electric vehicle shipments, while domestic demand has slowed [1][2] - Exports of new energy vehicles, including EVs and plug-in hybrids, doubled to 2.6 million units, contributing to overall vehicle exports surpassing 7 million units [2] - Passenger car sales in China rose by 6% to 24 million units in 2025, but December sales saw an 18% year-on-year decline [3] Export Growth - Deutsche Bank projects a 13% year-on-year increase in China's passenger vehicle exports for 2026, citing higher profitability and faster growth in overseas markets [4] - Predictions indicate that EV exports to the EU will rise by an average of 20% annually from 2026 to 2028 [5] Market Dynamics - Currently, overseas markets contribute less than 10% of revenue for most Chinese automakers, but this is expected to rise as exports expand [6] - Key export destinations include Russia, Latin America, the Middle East, Europe, and Southeast Asia, which accounted for about 70% of 2025 export volumes [7] Competitive Landscape - BYD has surpassed Tesla as the world's largest EV maker in 2025, although it reported a decline in deliveries by 18% in December [7]