The Chinese auto industry produced 34.5 million cars and trucks in 2025, which was more than double the US market of 16.3 million that year. While American automakers have always struggled with exports, China managed to ship seven million of them abroad last year, overtaking both Europe and Japan.
Critics in Europe, where Chinese cars are outselling their rivals from Japan, are becoming alarmed. Stéphane Séjourné, vice president of the European Commission, earlier this month accused Chinese automakers of pursuing a “predatory strategy” by dumping excess production on the European market. The result, he said, “is undeniable, loss of market share for our manufacturers and massive imports of Chinese models, which now represent more than 15 percent of the electrified vehicle segment in Europe.”
Critically, China produced 16.6 million New Energy Vehicles (NEVs, battery electrics, plug-in hybrids, and hybrids) in 2025, a 29 percent year-over-year increase. This is while the US is pulling back from a promising start with EVs. Some 22 percent of US sales are NEVs, but battery electrics are only 7.7 percent of that total. China’s NEV share is around 50 percent.
These developments are happening as tariffs have made Chinese cars nearly invisible on the American market—even Polestar is leaving. We’d have to go to Canada to see EVs from China. The result is that Chinese automotive developments—and new models—barely get covered in the US automotive media. The outmoded narrative remains that Chinese cars are unsafe and not ready for global markets.
Jim Motavalli
Xpeng debuted its L03 battery electric in Germany.
Rich Benoit, host of the popular Rich Rebuilds YouTube channel, visited China in July to test drive some Xpeng cars and attend the huge Guangzhou auto show and came back impressed. But he points out, “If Chinese cars do come to the US, I don’t think it would destroy American car manufacturing because they’d only bring over EVs—which aren’t a big part of sales here. If battery EVs are only five percent of the US market now, the number won’t jump overnight to 50 percent of total sales. They’re still not buying many EVs in states like Alabama and North Dakota.”
To shed light on where China is going, Autoweek talked to Tu Le, the Troy, Michigan-based founder and managing director of the Sino Auto Insights consultancy. Le lived in China from 2009 to 2022, and worked for the Ford Motor Company in Shanghai.
Autoweek: The Chinese industry, despite its size, is practically invisible here. So just give me an overview.
Tu Le: It’s technically about the size of the European Union and the US market combined, 24, 25, 26 million units, depending on if you’re adding commercial vehicles and things like that. But it’s been the number one market in the world since 2009, overtaking the US. It’s been big for quite some time, and orders of magnitude larger than everyone else.
Tu Le
Tu Le in China, where he lived from 2004 to 2017.
AW: According to the Wall Street Journal, Tesla wants to sell its assets in China after building a factory there. What’s your take on that?
TL: Elon denied the story, but there’s likely some truth. It does seem like Tesla has lost interest in manufacturing cars. They haven’t unveiled a new vehicle with the exception of the Cybertruck, and most people would argue that has been a bust for Tesla. The Model Y and the Model 3 are now pretty long in the tooth. It looks like Tesla would rather focus on the AI part, the self-driving part, the Cybercab part of the company, rather than the private passenger-vehicle market.
“It does seem like Tesla has lost interest in manufacturing cars. They haven’t unveiled a new vehicle with the exception of the Cybertruck, and most people would argue that has been a bust for Tesla.”
AW: Doesn’t that fit into a pattern we’re seeing in China where the Western companies are losing market share? As Chinese brands ascend, Chinese consumers are picking domestic cars rather than imports that were favored before. Is that part of this?
TL: With the exception of Tesla, I’d say that’s 100 percent accurate, Jim. Just a few years ago, five, six years ago, if you combined all the foreign automakers sales’ volume in China and then combined the domestic Chinese automakers’ sales volume, the foreign automakers sales volume was well over 50, 60 percent collectively. In the last quarter, it was around 27 percent.
NurPhoto//Getty Images
Tesla Shanghai Gigafactory.
We’ve lost around seven million units of ICE vehicles over the last four or five years on the Chinese market. Volkswagen Group announced that they’re going to take out three million units of capacity in their own system. One thing that stands out, though, is that Tesla’s sales volume has been pretty resilient in the China market. Let me give you a little bit of a history lesson: Tesla entered China by exporting Model Xs and Model Ss in 2014. And in 2018, they announced that they were going to build a factory in Shanghai, an agreement with the local Shanghai government. Tesla owns it 100 percent.
Job One rolled off the line, a Model 3 in December of 2019. So let’s say Tesla started building in China in 2020. And that’s when the hockey stick happened [with the rapid growth of NEV sales] in the China market. And we got to a million and a half NEVs, three and a half million units, six and a half million units. Now we’re at almost 15 million units. And I mentioned earlier that the entire Chinese market is in the middle-20-million range. That means 65 percent of the take rate is for NEVs. So more than two out of three cars sold in China is now a NEV.
AW: Americans aren’t buying a lot of EVs, which is what China mostly makes, so why are we so scared?
NurPhoto//Getty Images
A Wuling Hongguang Mini EV.
TL: Elon has famously said that he was building cars that were the best cars, not the best electric cars. Hence the Model S, the Model X, the Model 3, and the Model Y. And I think the Chinese have taken that lesson to heart. These vehicles are some of the best values, at least in China, that you can provide consumers. Because of the intense competition in the domestic market, Chinese consumers are able to buy feature-rich vehicles for less than $30,000.
Much less in some cases. It seems the Chinese can buy very good $20,000 cars, a category that no longer even exists in America.
General Motors has a joint venture brand in China called Wuling. And Wuling has a $6,200 car that they sell in the China market. It sells mainly in the lower-tier cities, the Wuling Hongguang Mini EV. Sales have been a few hundred thousand units per year, a fairly popular vehicle in the China market.
AW: The Europeans also put tariffs on Chinese cars, currently up to 35.3 percent depending on brand. But that hasn’t stopped Chinese automakers from selling cars in Europe. I was recently in Germany to see the rollout of the Xpeng Mona L03, which is chasing the Tesla Model Y. And the price differences for that car in China and Europe are very dramatic. It starts at $18,300 in China and at around $41,000 in Europe. The Chinese have to add in the cost of importing the cars, plus the tariffs, right?
VCG//Getty Images
New energy vehicles are loaded onto the BYD car carrier for export to Europe.
TL: That’s right. And originally, Europe had only tariffs on battery electric vehicles. Now they’re looking at applying tariffs to plug-in hybrids. And that was in order to encourage Chinese automakers to write checks, to foster foreign direct investment into the EU with cars built locally. Spain, for instance, has done a tremendous job attracting investment. And Spain is slowly but surely becoming a production hub for passenger vehicles in Europe.
AW: We’ve recently seen Volkswagen Group announce it’s going to cut half of its models, maybe close four plants in Germany. And how much of this is because of competition from China on the European market?
TL: I’d say quite a bit. The Germans in particular rely heavily on the China market for its profits. Porsche, in its best days, was shipping probably 310,000 or 320,000 cars a year globally [320,000 in 2023]. The best year they had in China, five or six years ago, was about 90,000 units. Okay, so China was over 30 percent of their sales, but they’ll be lucky if they ship 45,000 this year in China.
The Volkswagen Group, of which Porsche is a part, in its best days was at more than four million units in China. [From 2017 to 2019 annual deliveries consistently surpassed 4.2 million.] Over 30 percent of their global sales would come from the China market. It’s reduced substantially or shrank substantially over the last few years. The Chinese domestic players, BYD, Geely, Chery, have taken a lot of volume away from Volkswagen.
Tu Le
Tu Le: “Chinese consumers are able to buy feature-rich vehicles for less than $30,000.”
AW: This is probably true of Mercedes and BMW too, right? Have they seen similar drops?
Oh yes. I want to say Mercedes was around 700,000 to 800,000 sales in China. And both brands are bleeding now. Their electric vehicles aren’t selling well—they’re overpriced, under featured, and they can’t keep up with the speed of change and innovation happening in the China market.
AW: Do you think eventually we will see Chinese cars on the American market?
I’m going to do you one better. Jim Farley [CEO of Ford] told his staff at an internal town hall meeting July 30 that he expects the Chinese to be here within the next five to 10 years. [Ford Executive Chairman Bill Ford also said at an Axios event, “We can’t expect to keep them out forever, and we have to be able to beat them at their own game.”] I think that having Chinese cars in Canada and Mexico, surrounding us, the pressure is going to be too great.
Jim Motavalli is an auto writer and author (nine books) who contributes to Autoweek and Barron’s Mansion Global. He has written two books on electric cars, Forward Drive (2000) and High Voltage (2010), and hosts the Plugging In podcast.
Motavalli’s writing has appeared in the New York Times, CBS Moneywatch, Car Talk at NPR, Forbes, US News and World Report, Sierra Magazine, Audubon, and many more. In his spare time, he reviews books and jazz.