First Time China Experiences Decline in EV Exports During Trade War With the West
China’s electric vehicle (EV) exports have experienced a decrease for the first time amidst escalating trade tensions with the West and rising tariffs, as per new data released by Chinese authorities.
On June 14, the China Association of Automobile Manufacturers published its latest report on monthly production and sales in the automobile industry for May. The figures reveal that, for the first time, China’s monthly exports of electric and hybrid vehicles dropped by 9 percent year-on-year, with only 99,000 vehicles being exported in May.
The decline was primarily attributed to a significant decrease in electric vehicle sales. The May data shows that 77,000 EVs were exported, marking a 22.3 percent drop from the same period last year and a 13.8 percent decrease from April.
The United States and European Union have accused China of selling subsidized EVs at low prices, leading to both trade blocs implementing retaliatory measures.
In recent years, China’s economy has been weakening due to reduced domestic demand, while its EV industry has been facing overcapacity. This excess supply has been sold abroad at discounted rates, impacting other countries’ industries.
In response, the United States announced on May 22 a significant hike in tariffs on various imports from China, including raising tariffs on EVs from 25 percent to 100 percent.
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On June 12, the European Commission declared additional tariffs of up to 38.1 percent on imported Chinese-made EVs starting in July following months of investigations into state subsidies provided by China to the industry.
“Chinese automakers initially aimed to alleviate the pressure of intense competition in their local market by expanding into foreign markets,” stated Wang Shiow-Wen, an assistant researcher at Taiwan’s Institute for National Defense and Security Research, to the Epoch Times on June 12.
“If the EU’s tariffs hinder Chinese automakers from growing their market share overseas, it could lead not only to a wave of bankruptcies among Chinese automakers but also worsen China’s already deteriorating economy.”
From January to May this year, China exported 414,000 EVs, seeing its first decline at 1.8 percent. Nonetheless, China’s export of 105,000 hybrid vehicles doubled compared to the previous year.
According to the report, China’s overall car exports have still seen a 31.3 percent increase this year compared to 2023.
Sun Kuo-hsiang, a professor of international affairs and business at Nanhua University in Taiwan, mentioned that the EU’s escalated tariffs on China-made EVs would undoubtedly accelerate China’s economic downturn.
“China’s overall economy, especially its export sector, heavily relies on new energy vehicles such as electric vehicles, along with the dumping of solar panels, batteries, etc., on other countries,” Mr. Sun told the Chinese-language Epoch Times.
Regarding China’s overcapacity, particularly in the automobile industry, Ding Shuh-fan, a professor emeritus at the Institute of East Asian Studies at National Chengchi University in Taiwan, previously mentioned to The Epoch Times that “some of China’s auto industry is sustained by local governments and is a byproduct of the feudal economy.”
As China’s economy continues to falter, its car manufacturers have been shutting down one after another, leading to a price war among EV producers.
Renowned online financial commentator “Financial Cold Eyes” informed The Epoch Times that “the severe overcapacity cannot be absorbed domestically, and the supply significantly surpasses demand.”
He expressed his belief that “China’s automobile companies have minimal room for development domestically and internationally.”
Li Su, Luo Ya, and Cheng Jing contributed to this report.
