China passenger car exports rise 64% in September 2026 as EV demand grows and home sales weaken

China’s passenger car exports climbed sharply in September, even as sales at home stayed weak. Industry data showed a 64 per cent rise from the same month in 2025. Automakers in China were leaning more on overseas buyers for growth. Demand was strong for plug-in hybrids and pure electric vehicles.

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The China Association of Automobile Manufacturers said China shipped about 919,000 passenger vehicles in September. Over January to September 2026, exports topped 7.1 million units. That total was more than 70 per cent higher than the same period last year. Analysts said exports were becoming central to sales and profit plans.

China passenger car exports rise as domestic sales fall

At the same time, domestic passenger car sales in China fell for most of the year. The association linked this to weaker consumer confidence and reduced subsidies. September sales dropped 27 per cent year-on-year to more than 1.6 million units. Companies were trying to offset this slowdown with foreign demand.

Stephen Chan of S&P Global Ratings said the industry was relying more on overseas markets. Consultancy AlixPartners and other analysts expected exports near 10 million vehicles in 2026. China was already the world’s largest vehicle exporter. However, trade partners were showing more concern about local industry risks.

China passenger car exports drive growth in Europe and other regions

In recent months, Chinese automakers targeted faster gains in Europe, Latin America, Southeast Asia and Africa. Canada was also opening its market to Chinese EV exports. This followed a tariff cut deal with China. Analysts said these moves helped firms balance slower demand in China.

In Europe, Chinese brands were pressing rivals with lower production costs. AlixPartners estimated a Chinese-branded EV cost about USD 20,000 to make. A similar European model cost around USD 31,000. Analysts said this gap helped Chinese firms compete on price.

China passenger car exports face EU hybrid quota and tariffs

The EU had already raised tariffs on pure electric vehicles from China. That shift encouraged more hybrid exports from Chinese carmakers. Policy talks then focused on rising sales of Chinese hybrids in Europe. Deutsche Bank said Chinese automakers took about 12 per cent of Europe’s new-car market in August.

The same research note said Chinese firms made up one in four hybrid sales in the region. EU trade chief Maros Sefcovic said Friday an interim deal was reached. Officials said the deal could cut hybrid exports to the bloc. The quota set a limit of 350,000 hybrid imports each year.

Two senior EU officials said the cap covered hybrid vehicles made in China, including plug-in hybrids. The officials spoke anonymously under European Commission policy. One official said monitoring could start as early as December. Customs teams across the 27-nation bloc would track imports and stop shipments after the limit.

The limit would not include cars built in Europe by Chinese companies. Analysts said restrictions could still cloud overseas plans for Chinese automakers. Deutsche Bank analysts said an import cap could disrupt profitable growth in Europe. They said the European market had been a key driver for export earnings.

"You cant expect BYD or the other OEMs manufacturers to export too many cars without facing tariffs or pushbacks from the foreign governments,\" Xiao Feng, head of Hong Kong and China industrials research at investment group CITIC CLSA, told reporters recently.

Geopolitics was also raised by BYD leadership. Stella Li, executive vice president, acknowledged pressure on overseas expansion. Stella Li spoke at an event earlier this month. BYD was expanding production in Thailand, Indonesia, Brazil and Hungary, Stella Li told the Milken Institute Asia Summit in Singapore.

China passenger car exports prompt more overseas production

Ming Lee, head of Greater China automotive and industrial research at BofA Global Research, said more overseas production was likely. Local output could reduce tariff exposure and other risks. \"More and more volume will be made locally,\" Ming Lee said. Analysts linked this strategy to rising trade barriers.

The US market remained difficult for Chinese EV makers. Heavy tariffs had effectively blocked Chinese EVs from the US, analysts said. A meeting between President Donald Trump and Xi Jinping during Xi’s state visit to Washington last month brought no access deal. Experts said political uncertainty kept the US a lower priority.

China’s export surge in September highlighted how strongly automakers were depending on overseas markets. The data also reflected weaker demand at home during 2026. At the same time, the EU’s planned hybrid quota and other trade limits signalled tougher conditions abroad. Analysts said firms were responding by building more vehicles outside China.

With inputs from PTI