Amid the electric vehicle push at the start of the decade, automakers (and then countries) grew increasingly concerned about the long-anticipated surge of new cars and brands from China flooding into large markets like the United States and Europe. While seeds have been planted and China’s exports continue to worry countries, the threat of cheaper gas-engined cars could be more immediate.
In a Reuters report on Tuesday, eight of the 10 largest-selling automakers in China were revealed to be part of the more than 6 million gas and gas-electric vehicles expected to be exported globally by the end of 2025, or about three-quarters of the country’s automotive exports. That’s up from about a million five years ago.
The change is led by a continued problem for China’s automotive industry, for years now the largest in the world: Overcapacity.
Chery Automobile Co. is the largest exporter, with the majority of its over 1 million exports through the end of October this year being gas-powered in one way or another. The second-biggest exporter in China, BYD, sent mostly battery electric vehicles to other countries so far this year. And Tesla, the eighth-largest automaker in the country, makes only EVs.
A principal reason for China’s largest automakers focusing exports on vehicles without plugs is that the country’s heavily-subsidized EV market remains buoyant for the home teams and less successful for the likes of Volkswagen Group, Mercedes-Benz, General Motors, and other US and European brands, especially at the higher end. That’s conversely left a surplus of capacity for other vehicles, though.
Now that the US and European Union are looking to shift away from original EV mandates by the middle of the next decade (something Chinese-owned Volvo Cars and Polestar are notably fighting against), Reuters says China’s surplus of capacity to produce gas-powered vehicles has pressured its automakers—the vast majority of which are government supported—to keep factories moving and expand new markets. Analysts have also been increasingly vocal about the need for China to start consolidating some of its roughly three dozen brands in a saturated market with both large domestic and foreign brands.
China’s leading automakers have already set sights beyond Europe, with BYD building a presence in Brazil and other Latin American countries, according to a recent Politico report. Russia has also been an emerging market for China’s cars, too.
However, it could be a double-edged sword for some of these companies. Competing automakers with better-established reputations, loyal customers, and long-standing sales and service support already have lots of popular and less-than-popular gas and hybrid vehicles and are willing to hold prices and pile on incentives in the short term to stop buyers jumping to new offerings.
And there’s the issue that many Chinese-branded cars still sell mostly on price, with reviewers usually including that caveat. While the Tesla Model Y-rivaling XPeng G6, destined for Europe, was given a mostly positive review from InsideEVs, the UK’s Autocar said the similarly-sized Chery Tiggo 7 plug-in hybrid was satisfactory, “for those who just need a car.”
None of this means you’re likely to see many cars from China in the US anytime soon, though, unless they come from Mexico, which China’s automakers have long targeted. Years of revised tariff policies on Chinese goods (especially vehicles and battery packs), as well as concerns about China-developed software, have mostly made the American market off-limits to the passenger car industry and left companies like BYD to assemble buses in California. Components, while cheaper to produce in China, still face stiff tariffs.
However, Americans have been able to buy cars assembled in China for years, but that number shrank this year. Volvo stopped importing the slow-selling S90 luxury sedan earlier this year after being imported from a plant in China since 2018, while it moved production of the EX30 EV SUV to Belgium with the introduction of the 2026 models, and declined to import a new ES90 electric luxury car, rather than using one of its factories in the US or Europe to build it for export. General Motors, however, continues to import the Buick Envision from its sole joint-venture plant with SAIC Motor, but the unchanged 2026 model landed in the US with a $3,000 price hike over the 2025 version.
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