China’s carmakers are exporting vast numbers of gasoline-powered vehicles to emerging and second-tier markets worldwide, a Reuters investigation shows, even as Beijing drives a domestic surge in electric vehicles (EVs). The exports — fuelled by excess capacity in legacy production lines and the knock-on effects of aggressive EV subsidies — are reshaping competition in regions from Eastern Europe to Latin America and Africa.
The phenomenon is paradoxical: policies that favoured EV makers at home have helped displace foreign and joint-venture brands in China, leaving state-owned and legacy manufacturers with factories and unsold petrol models. Faced with a saturated domestic market, many groups are turning to exports, flooding markets that still depend heavily on internal-combustion engines.
State-backed makers and legacy firms lead the charge
China’s largest exporters of petrol vehicles include state-linked names such as SAIC, BAIC, Dongfeng and Changan, alongside private groups like Geely, Great Wall and Chery. Combined, these manufacturers have ramped up shipments from roughly 1 million vehicles annually in 2020 to an estimated 6.5 million this year, according to Chinese consultancy Automobility.
SAIC, for example, saw domestic joint-venture sales plunge — SAIC-GM’s China sales fell from more than 1.4 million in 2020 to about 435,000 in 2024 — prompting the group to redirect production towards exports. Chery’s exports grew from 730,000 vehicles to 2.6 million between 2020 and 2024, while Changan, Dongfeng and others have similarly expanded overseas footprints.
Executives at several Chinese groups told Reuters that exporting petrol cars is a pragmatic response to idle capacity: building up EV output domestically left assembly lines for gasoline vehicles underutilised, and exporting those models helps preserve jobs and factory utilisation.
Competitive pressure in emerging markets
The surge in petrol-vehicle exports is concentrating in markets where EV charging infrastructure remains sparse. Countries across Eastern Europe, Latin America, the Middle East, Africa and parts of Southeast Asia are seeing a steady inflow of affordable Chinese petrol cars and pickups.
Dealers and distributors in Poland, Chile, Uruguay and Mexico described a dramatic proliferation of Chinese brands — often offering vehicles at significantly lower prices than established rivals. In Uruguay, for instance, a Chinese pickup based on an older Nissan platform can cost nearly one-third less than a comparable Nissan model, prompting farmers and small-business buyers to choose the cheaper option.
The impact is already visible in market shares and sales declines for legacy Western and Japanese automakers. GlobalData and local industry bodies report sharp sales falls for established brands in several markets, with Chinese marques rapidly gaining footholds.
Policy paradox: EV subsidies drive petrol exports
Industry analysts say the twin effects of China’s industrial policy explain the paradox. Subsidies and local incentives prioritised new EV entrants, igniting a price war that eroded sales for some joint ventures and legacy brands inside China. That, in turn, created surplus capacity in factories configured for petrol cars.
Local governments in China had encouraged EV plant investment, often financing infrastructure and land to attract makers. The result was a boom in EV capacity alongside continued capacity for gasoline vehicles — a combination that, analysts argue, made exports the only viable way to monetise idle lines.
“Excess capacity is being aimed back at the rest of the world,” said Bill Russo, CEO of Automobility. Consultancies forecast Chinese automakers could add as many as four million exported vehicles by 2030, which would lift their global share substantially.
Global response and trade frictions
The rise in petrol exports has prompted pushback. Mexico raised tariffs on Chinese car imports to 50% this year, citing job protection and pressure from the United States. Russia and South Africa have also imposed or threatened measures to shield domestic capacity. In some markets Chinese imports surged until authorities intervened with levies or tighter import rules.
Western automakers say they will respond by adapting pricing, local production and partnerships. Volkswagen, GM and Stellantis have cited strategies to invest in local manufacturing or to export China-built cars selectively. Joint ventures in China are also evolving: some foreign partners are exploring exports of China-made models to other markets, acknowledging the changing competitive landscape.
Short-term pragmatism, long-term EV ambition
Analysts emphasise the distinction between short-term realities and Beijing’s long-term objectives. While many Chinese groups today export petrol cars because those markets remain receptive, the state’s long-term industrial aim remains global leadership in EVs and battery technology. BYD and Tesla-like firms already spearhead plug-in exports, shifting the composition of China’s overall shipments.
For incumbents in Europe, North America and advanced markets, the immediate challenge lies in defending share in developing regions where cost sensitivity, limited charging networks and high taxi or farm-vehicle demand favour petrol models.
What it means for India and other markets
Countries with nascent EV infrastructure — including many parts of India’s export footprint — may see increased competition from low-priced, feature-rich petrol models. Policymakers will face trade-off decisions: protect domestic industry through tariffs and incentives, or allow cheaper imports that lower prices for consumers but erode local manufacturing prospects.
As Chinese exporters deepen global reach, governments and legacy automakers must weigh short-term market realities against strategic goals such as decarbonisation and preserving domestic industrial bases.