The rapid spread of electric vehicles in China has upended the domestic car market, destroying demand for many older Chinese gasoline models and forcing state-owned giants such as SAIC, BAIC, Dongfeng and Changan to sell millions of unwanted vehicles with internal combustion engines abroad.
While Western politicians are focusing on subsidized Chinese electric vehicles, a much bigger global shock is the influx of cheap Chinese gasoline vehicles, which currently account for almost two-thirds of China's exports and which have grown from 1 million in 2020 to more than 6.5 million this year. Massive overcapacity created by years of government subsidies for electric vehicles and a race by local governments to build factories has left China with unloaded production lines capable of producing up to 20 million fossil fuel vehicles annually, forcing automakers to seek new markets in Eastern Europe, Latin America, Africa, and Southeast Asia. These emerging markets, where electric vehicle charging stations are rare, are currently facing fierce competition as Chinese brands adapt affordable gasoline vehicles with rich functionality to local needs, rapidly undermining the market share of global players such as GM, VW, Nissan and Toyota.
Export growth is supported by government support for Chinese companies, a flexible technology strategy, and the ability to repurpose old joint venture projects at a lower cost. The result is a global reorganization of competition: Chinese automakers are poised to occupy 30% of the global car market by 2030, with the "real battle" unfolding not in the United States or Europe, but in emerging markets, where price, durability and accessibility are the most important.
