The Chinese vehicle industry is relatively immune from the United States’ tariffs due to the limited number of direct exports to the U.S. and almost no sales of domestic brands in the U.S. market, according to Cui Dongshu, Secretary General of the China Passenger Car Association (CPCA). Cui highlighted the strong growth potential of Chinese car sales in other markets. He stressed the need for Chinese automakers to strengthen partnerships with companies from countries in Belt and Road Initiative (BRI) and the Global South. Specifically, Cui said promoting the use of small-sized electric vehicles (EVs) in those markets is key to addressing demand for navigating narrow streets due to inadequate infrastructure development in certain regions.
“Currently, there is substantial potential for gasoline-powered Chinese vehicles by ramping up the export of these products. Promoting plug-in hybrid models will also unlock tremendous opportunities due to cost-effectiveness and energy-efficiency,” he said. Citing data from the General Administration of Customs, Cui said China exported only 116,138 vehicles to the U.S. in 2024, accounting for a mere 1.81% of China’s total auto exports. In contrast, the so-called reciprocal tariffs imposed by the U.S. have a more significant impact on European, Japanese and South Korean automakers. Huatai Securities predicts that the 25% additional tariffs imposed by the U.S. will affect 20% of direct exports from Japan and South Korea, and 30% of direct exports from German automakers, translating to an estimated sales impact of approximately 270,000, 200,000, and 160,000 vehicles, respectively, in 2025. Huatai Securities suggests that the U.S. tariff policies may indirectly promote cooperation between China and other countries and regions, potentially enabling Chinese automotive companies to gain more market share in the EU and South-east Asia.
China and Europe agreed to swiftly resume negotiations on price commitments for electric vehicle anti-subsidy cases, fostering a favorable environment for promoting investment and industrial cooperation between Chinese and European enterprises. “China’s global automotive market share is only around 35%, with Chinese branded vehicles accounting for less than 28%, leaving ample opportunities for growth. There are numerous opportunities for Chinese brands to expand overseas, especially in countries without established automotive industries that welcome our localized products,” Cui said, as reported by the China Daily.
But Chinese component makers could fall victim to the China-U.S. trade war. At risk is the CNY100 billion worth of car parts – from electric-car batteries to lidar sensors and drive control systems – that Chinese companies shipped to the U.S. annually, as tariffs on all Chinese-made goods surged to 145%, from just 10% three months ago. China shipped CNY99.8 billion worth of car components to the U.S. last year, or 15% of its auto parts exports. China’s top six electric vehicle (EV) battery producers including Contemporary Amperex Technology (CATL) and Gotion High-tech hold two-thirds of the global market, according to data compiled by Seoul-based SNE Research.
The Global Times adds that in the first quarter of 2025, China's exports of new-energy vehicles (NEVs) recorded a year-on-year increase of 43.9% to 441,000 units. Automobile production grew by 14.5% to 7.561 million units, while sales totaled 7.47 million units, up 11.2%. The production of NEVs surged 50.4% year-on-year to 3.182 million units, while sales increased by 47.1% to 3.075 million units. Sales of NEVs reached 41.2% of the total sales. The Shanghai International Automobile Industry Exhibition 2025, which is set to be held from April 25 to May 2, will kick off an intensive product launch cycle, and promotional campaigns are in full swing across multiple regions. These factors will help further unleash consumer potential and sustain the market's growth momentum.
