China’s electric vehicle (EV) exports have recorded their first decline amid intensifying trade tensions with the West that have resulted in increasing tariffs, according to new data released by China’s authorities.
On June 14, the China Association of Automobile Manufacturers released its report on monthly production and sales for the automobile industry in May. The data show that, for the first time, China’s monthly electric and hybrid vehicle exports were down by 9 percent year-on-year, with only 99,000 vehicles exported in May.
The downward trend was mostly because of a significant drop in electric vehicle sales. According to the May data, 77,000 EVs were exported, down by 22.3 percent from the same period last year and down by 13.8 percent from April.
The United States and European Union have claimed that China is dumping cheap government-subsidized EVs, and both trading blocs have imposed subsequent countermeasures.
In recent years, China’s economy has been declining, with reduced domestic demand, while its EV industry has been operating to overcapacity. Excess stock has been dumped overseas at low prices, crushing other countries’ industries.
In response, the United States announced on May 22 a significant increase in tariffs on a range of China-linked imports, including a jump in tariffs on EVs from 25 percent to 100 percent.
On June 12, after months of investigation on the Chinese regime’s subsidies to the industry, the European Commission announced additional tariffs of up to 38.1 percent on imported China-made EVs starting in July.
“Chinese automakers originally hoped to ease the pressure of excessive competition in their domestic market by expanding foreign markets,” Wang Shiow-Wen, an assistant researcher at the Taiwan’s Institute for National Defense and Security Research, told the Epoch Times on June 12.
“If the EU’s tariffs prevent Chinese automakers from expanding its overseas market share, it may not only trigger a wave of bankruptcies of Chinese automakers but also make the deteriorating Chinese economy worse.”
According to the report, from January to May this year, China exported 414,000 EVs, a year-on-year decline of 1.8 percent, also its first decline. However, China’s export of 105,000 hybrid vehicles was a two-fold increase year on year.
China’s overall car exports increased by 31.3 percent this year compared with 2023, according to the new data.
The EU’s increased tariffs on China-made EVs will certainly accelerate the worsening of China’s economy, according to Sun Kuo-hsiang, professor of international affairs and business at Nanhua University in Taiwan.
“China’s overall economy, especially the export sector, currently relies heavily on new energy vehicles or electric vehicles, and also the dumping of photovoltaic panels, batteries, et cetera to other countries,” Mr. Sun told The Epoch Times.
As to China’s overcapacity, especially in the automobile industry, Ding Shuh-fan, professor emeritus of the Institute of East Asian Studies at National Chengchi University in Taiwan, told The Epoch Times earlier that “some of China’s auto industry is supported by local governments and is a product of the feudal economy.”
As China’s economy continues to slump, its car manufacturers have closed down one after another, and a price war now persists between EV makers.
Popular online finance commentator Financial Cold Eyes told The Epoch Times that “the serious overcapacity cannot be absorbed domestically, and supply seriously exceeds demand.”
He said that he believes “China’s auto companies have very little space for development, both domestically and internationally.”
