China’s Gasoline-Car Exports Surge in EV Boom Reshaping Global Auto Markets

China earlier this year accelerated a global shift in international markets resulting in gasoline-powered vehicles accounting for most of its auto exports, while demand in its own domestic markets shifted sharply to electric cars and forced legacy manufacturers to seek buyers from Poland to South Africa and Uruguay, according to a Reuters report released Tuesday.

The shift began as Chinese electric-vehicle makers captured half of the country’s car market within a few years, crushing sales of gasoline models from foreign automakers such as Volkswagen, General Motors, and Nissan, and eroding the positions of many domestic brands as well. As EV-focused subsidies and policies triggered a steep price war at home, Chinese legacy manufacturers redirected unsold gasoline cars abroad.

Since 2020, fossil fuel vehicles have made up 76% of China’s auto exports, with annual shipments climbing from 1 million to what analysts expect will exceed 6.5 million this year, according to China-based consultancy Automobility. Those volumes alone made China the world’s largest vehicle exporter as of 2023, industry and government data show.

The surge underscores how Beijing’s domestic industrial strategy reverberates well beyond its borders. Government-backed investment in EVs upended foreign firms in China and intensified global competition, even as Western policymakers concentrated mostly on shielding their markets from subsidized Chinese electric cars.

A Reuters review of sales data and interviews with more than 30 executives, distributors, and industry researchers shows that Chinese gasoline cars now dominate emerging and mid-tier markets, the result of a collision between China’s current drive to lead the EV sector and earlier policies that grew its combustion-engine industry through foreign technology transfers.