China Floods the World with Gasoline Cars it Can’t Sell at Home

While Western nations focus on the competitive threat of Chinese EVs, a different challenge is reshaping the auto industry.

China’s gasoline-vehicle exports alone were enough last year to make it the world’s largest auto-exporting nation by volume. (Photo: Changan Dominicana) 

Beijing's legacy automakers are saturating emerging and second-tier markets with fossil-fuel vehicles — often undercutting their foreign partners, Nick Carey reported for Reuters.

The China-based consultancy Automobility reported that fossil-fuel vehicles have accounted for 76% of Chinese auto exports since 2020, and total annual shipments jumped from 1 million to likely more than 6.5 million this year.

China’s electric-vehicle industry captured half its domestic market in just a few years, crushing sales of gasoline-powered vehicles from once-dominant global automakers.

Many Chinese legacy automakers also watched their domestic sales collapse — and responded by flooding the world with fossil-fuel vehicles they couldn’t sell at home.

While Western policymakers have focused on the threat of China’s heavily subsidized EVs — protecting their markets with tariffs — U.S. and European automakers face greater competition from China’s gas-powered vehicles in countries from Poland to South Africa to Uruguay.

The boom in gasoline-powered exports is driven by the same EV subsidies and policies that devastated the China businesses of automakers including VW, GM, and Nissan by underwriting scores of Chinese EV makers and igniting a brutal price war, an assessment showed.

The trend highlights the far-reaching impacts of Chinese industrial policy, as foreign competitors struggle to keep pace with government-backed firms chasing Beijing’s goals to dominate critical sectors nationally and globally.

China’s gasoline-vehicle exports alone — not including EVs and plug-in hybrids — were enough last year to make it the world’s largest auto-exporting nation by volume, industry and government data show.

This account of Chinese automakers’ global expansion is based on a Reuters review of auto-sales data in dozens of countries and interviews with more than 30 people, including executives from 11 Chinese and two Western automakers, distribution managers for Chinese brands, and industry researchers.