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

HONG KONG (AP) — China’s passenger car exports jumped 73% year-on-year in May to around 809,000 vehicles, an industry group reported Wednesday, as higher gasoline and diesel prices due to the war in Iran raised interest in electric vehicles.

The China Association of Automobile Manufacturers said Wednesday that exports of pure EVs and plug-in hybrids more than doubled in May from a year earlier to about 435,000 units, or more than half.

That’s up from the about 796,000 passenger cars exported in April, data from the China Association of Automobile Manufacturers showed.

Chinese automakers such as BYD have been stepping up their overseas expansions, targeting markets including in Latin America, Asia and Europe at a time when domestic demand is coming under pressure in partly due to scaled back government incentives for drivers to switch to EVs.

Domestic passenger car sales in May fell 23.4% from a year earlier to 1.44 million vehicles, the CAAM said, the seventh straight month of year-on-year declines. Sales of cars with internal combustion engines — including gasoline and diesel vehicles — fell almost 42% from the year before as the share of EVs grew.

UBS analysts expect China’s annual passenger car exports to rise about 40% in 2026 from a year earlier, with EV exports possibly up about 80%.

“The high oil price certainly has translated into further higher interest on the EV,” said Paul Gong, head of UBS’s China automotive industry research.

China’s car exports were stronger than expected in the first few months of this year, Gong said, while domestic car sales were weaker than expected.

Claire Yuan, an auto analyst at S&P Global Ratings, expects China’s passenger car exports to maintain a strong momentum in 2026 and forecasts a year-on-year growth of 30% to 50%.

Roughly one in four new cars sold globally last year was electric, the International Energy Agency said in its latest annual global EV outlook, released in May, and that’s going to grow further this year despite a more sluggish start of the year.

EV sales could reach 23 million and make up nearly 30% of all cars sold in 2026, the IEA said.

China is the world's largest producer of EVs, supplying the majority of EVs sold worldwide.

BYD, China’s largest EV maker, sold over 160,000 vehicles abroad in May, up 80% from the year before. It aims to sell 1.5 million vehicles overseas this year, up more than 40% from last year’s 1.05 million.

The automaker based in southern China overtook Tesla last year as the world’s biggest EV maker by sales.

Selling more cars overseas may also generate better profitability for Chinese carmakers, as an intense price war in China last year has eroded the profitability of many automakers.

Yuan of S&P said China’s car sales could pick up in the second half of the year as buyers step up purchases after automakers launch fresh lineups.