Chinese electric vehicle (EV) builders are increasingly shipping their cars abroad to spur international sales ahead of an expected downturn in their home market, analysts say, as Beijing phases out incentives such as tax holidays and cash subsidies. The carmakers, which can enjoy a net margin of CNY20,000 per vehicle by selling their cars outside mainland China, are rolling out more models and pushing into untapped territories to chase high profitability. Stellantis-backed Leapmotor, one of the fastest-growing Chinese EV assemblers in terms of sales this year, announced that two of its models would debut in Brazil and Chile. Its C10 and B10 SUVs would be displayed in 36 showrooms across 27 Brazilian cities by the end of this year, while they would be sold in five stores in Chile, the Hangzhou-based company said in a statement. “In the near future, Leapmotor will expand its footprint in other South American markets including Argentina, Colombia and Ecuador,” it said. “We will have a presence in all the key markets on the continent.”
Nio, headquartered in Shanghai, said in November that hundreds of its fully electric Firefly minicars were headed for Europe as it took on BMW’s Mini and the Mercedes-Benz Smart brand in some of the developed economies on the continent. The Firefly models, including right-hand-drive variants, would also target markets in North America and Asia, the company said. IM Motors, an EV unit of Shanghai-based state-owned carmaker SAIC, said that the first batch of its IM6 SUV, starting at USD37,978, would be delivered to customers in New Zealand next month as the brand stepped up its efforts to explore market potential in Oceania.
The average net per-vehicle margin – the gap between the selling price and production costs such as raw materials, labor and logistics – stood at about CNY5,000 among Chinese carmakers, according to Nick Lai, head of auto research in the Asia-Pacific at JPMorgan. But the margin could jump fourfold to CNY20,000 if the cars were exported to overseas markets where they could enjoy higher prices.
Car sales in China were likely to contract in 2026, breaking a six-year streak, if Beijing stopped granting cash subsidies and tax incentives to buyers, JPMorgan forecast in a recent research report. Car sales could slow by 3% to 5% next year in a more cautious scenario, Lai said. China’s automotive sector last contracted in 2020, when carmakers handed a total of 19.5 million units to customers, down 6.2% from 2019, data from the China Passenger Car Association (CPCA) showed. Until the end of this year, Chinese buyers looking to replace existing cars with EVs are eligible for a trade-in subsidy of CNY20,000, while those buying petrol-powered cars are entitled to a CNY15,000 rebate. China’s output of vehicles, which included buses and lorries as well as passenger cars, could hit 33 million units in 2025, compared with an estimated capacity of around 50 million units, the South China Morning Post reports.
