As sales of Chinese electric cars increased globally, China overtook Japan to become the world's top auto exporter in the first half of 2023, according to a report by Nikkei Asia. 

According to the data, leading Chinese automakers exported 2.14 million automobiles between January and June. As per data obtained from the China Association of Automobile Manufacturers (CAAM), exports increased by over 76% for the year, while the Japan Automobile Manufacturers Association reported that exports from Japan stayed at 2.14 million units but increased by 17%.

China was already ahead of Japan, with higher exports in the January-March quarter. The rise in exports comes with the development of the electronic vehicle (EV) industry and its increasing demand in European and Russian markets.

China's exports of new energy vehicles, such as EVs, plug-in hybrids, and fuel cell cars, more than doubled from January to June to make up 25% of the country's total exports of automobiles. Tesla exported more than 180,000 automobiles utilizing its Shanghai factory as an export centre for Asia, while its main Chinese competitor BYD exported more than 80,000 autos.

According to customs data produced by CAAM, Russia was the biggest destination for Chinese auto exports from January to May, accounting for 287,000 vehicles, including gasoline-powered vehicles. After Moscow's invasion of Ukraine in February 2022, South Korean, Japanese, and European automakers reduced their presence in Russia. To fill this void, Chinese brands have entered the market.

Belgium, a crucial European transit hub that is electrifying its auto fleet, and Mexico, where demand for gasoline-powered vehicles is strong, were also high on the list of destinations for Chinese exports.

China had the most car sales for newly manufactured vehicles in 2022 with a total of 26.86 million vehicles sold globally. Including gasoline-powered vehicles, EV sales in Japan reached 5.36 million, topping the nation's 4.2 million new vehicle sales overall.

According to a 2027 prediction by American company AlixPartners, 39 percent of new car sales in China will be electric vehicles. That would surpass the predicted 23 percent global EV uptake.

Demand has greatly increased in China as a result of government incentives for EV sales. By 2030, it's expected that Chinese producers like BYD would sell 65% of the country's electric cars.

Chinese manufacturers are becoming more competitive abroad because of a domestic supply network for lithium-ion batteries, which determines the efficiency and cost of EVs.

"After 2025, Chinese automakers are likely to take a significant share of Japan's major export markets, including the U.S.," said Tomoyuki Suzuki, managing director at AlixPartners in Tokyo.

Image source: Nikkei Asia