China car exports jump 73% in May as high fuel prices raise interest in EVs

China’s passenger car exports rose 73% year-on-year in May to approximately 809,000 vehicles, according to the China Association of Automobile Manufacturers. Exports of electric vehicles (EVs) and plug-in hybrids more than doubled to 435,000 units, accounting for over half of total exports. This follows a 796,000-vehicle export total in April. The surge comes as higher gasoline and diesel prices, linked to the war in Iran, have increased global interest in EVs. Chinese automakers, including BYD, are expanding overseas to markets like Latin America, Asia, and Europe amid weakening domestic demand. Domestic passenger car sales dropped 23.4% year-on-year in May to 1.44 million vehicles, marking the seventh consecutive monthly decline. Sales of internal combustion engine vehicles fell nearly 42% as EV adoption grows. UBS analysts project China’s annual passenger car exports will rise 40% in 2026, with EV exports up 80%. BYD, China’s largest EV maker, sold over 160,000 vehicles abroad in May—a 80% increase—and aims for 1.5 million overseas sales this year, up from 1.05 million in 2025. Domestic automakers face profitability challenges due to intense price competition, making overseas expansion a key strategy. Analysts at S&P Global Ratings expect China’s passenger car exports to grow 30% to 50% in 2026. The International Energy Agency (IEA) reports that one in four new cars sold globally in 2025 was electric, with projections of 23 million EV sales in 2026, comprising nearly 30% of the global market.