China’s Rising Vehicle Exports Help to Insulate Country’s Automakers From Faltering Domestic Economy

China’s automakers may be able to overcome near-term softness in domestic economic growth prospects by expanding their sales reach abroad. Exports of Chinese-made vehicles are surging across multiple continents with Russia taking in a swelling number of gas-powered vehicles and Europe primed to experience a near-doubling of China’s EV market share within the EU. 

If China isn’t already the world’s leading exporter of automobiles, Moody’s sees the country taking that crown by the end of the year. The country’s top EV producer, BYD, overtook Tesla in number of battery-powered vehicles produced for the first time ever in Q3. Record sales figures from other leading Chinese EV brands like Li Auto and NIO show rapid paces of growth throughout the past year.

Related Stocks: Tesla, Inc. (TSLA), NIO Inc. (NIO), BYD Company Limited (BYDDY), Li Auto Inc. (LI)

Earlier this year, MRP highlighted AlixPartners data that showed China had become the world’s top exporter of automobiles in Q1, shipping 1.07 million vehicles abroad and surpassing Japan’s quarterly tally near 1.05 million. Though Moody’s analytics still has China ranked number two in exports, the country has already surpassed South Korea and Germany over the past couple of years, and is expected to take Japan’s top spot by the end of the year.

The New York Times notes that Chinese carmakers, dealing with a softening of the domestic economy and a shift to plug-in vehicles, are stuck with unused factory capacity to build about 15 million gasoline-powered cars per year. They have responded by sending more than four million cars this year to foreign markets, at bargain prices. Many of these gas-powered vehicles are now shipping off to Russia, which recently became the top buyer of Chinese-made autos in the world and significantly…