Chinese Car Exports Surge Past Previous Full-Year Record Despite EU Tariffs and Domestic Slump

Chinese automakers shipped over 6.2 million passenger vehicles abroad during the first eight months of the year, topping the total recorded across the entirety of 2025 with four months remaining, according to reporting by the Associated Press cited by The Next Web. The surge in overseas sales was capped off by a strong August performance, during which international shipments reached roughly 890,000 units, representing a 67.1% increase compared to the same period last year.

In contrast, domestic demand within China continued to soften. Fewer than 1.5 million automobiles were sold locally in August, marking a 25.6% year-over-year slump. As previously reported by The Next Web in July, Chinese auto sales had already dropped 20% during the first six months of the year, reflecting the market's weakest stretch since 2021.

However, the rapid expansion of overseas shipments is offsetting the domestic downturn. Financial analysis firm S&P Global Ratings projects that full-year passenger vehicle exports from China will rise between 50% and 70%. S&P Global analyst Stephen Chan noted to the news agency that robust growth in export volumes will significantly cushion the impact of sluggish domestic sales.

European markets have served as a primary destination for this export surge. Data from automotive market research firm Dataforce reveals that Chinese auto brands captured a record 10.9% share of the European market in June, supported by 150,272 registrations—a 118% jump year-over-year.

This growth has largely shifted toward plug-in hybrid vehicles (PHEVs), which remain exempt from the European Union's recent tariffs on fully electric models. Enacted in October 2024, the EU measure imposes surcharges of up to 35% on top of the base 10% import duty for battery electric cars. These tariffs are assigned based on the manufacturing site rather than the brand origin, meaning European automakers producing electric vehicles in Chinese facilities are also subject to the additional fees.

Taking advantage of the policy structure, Chinese manufacturers captured 28% of Europe's plug-in hybrid market during the first half of the year. During this period, BYD's Seal U model outperformed Volkswagen's Tiguan in European sales, pushing the German vehicle down to fourth place in its segment.

While German outlet Handelsblatt reported that the European Commission has been weighing tariffs on Chinese plug-in hybrids since June, no formal trade restrictions have been implemented yet. Any prospective duties on PHEVs are expected to be lower than those on all-electric vehicles because their smaller battery sizes account for a lower portion of overall vehicle value.

Furthermore, regulatory adjustments may have limited effect on key market players due to shifting manufacturing footprints. Chinese EV giant BYD plans to commence mass production at its new facility in Szeged, Hungary, this quarter, where it will produce the Dolphin Surf. Because vehicles assembled at the Hungarian factory will count as European production, BYD will bypass EU import duties altogether.