Under pressure at home, China's electric car makers look abroad for growth

Despite intense competition, slower sales growth and demand pressure in China's domestic market, the country's electric vehicle makers are steadily strengthening their position internationally. Recent sales figures from BYD and Xiaomi in particular illustrate the global expansion of Chinese electric cars.

According to figures released on Sunday, BYD, one of China's largest electric car makers, recorded sales growth in October for the sixth consecutive month. Its sales rose 11 percent from the same period last year to 490,168 units. The pace of growth, however, eased from the previous month; in September BYD's sales had risen 17 percent.

BYD's expansion overseas is far faster than at home. In October its overseas deliveries rose 102.8 percent to 170,194 units. The figure shows the international market has become one of the most important areas of sales for the company.

Chinese technology firm Xiaomi is also advancing rapidly in the electric car market. The company, known as a smartphone maker, said it delivered more than 50,000 electric cars in October, its highest in a single month this year. It had delivered more than 30,000 in August and more than 40,000 in September.

In the first 10 months of the year, Xiaomi's total deliveries reached 336,000 units. The company has set a target of delivering 550,000 cars in total in 2026, and by the first 10 months about 61 percent of that target had already been met.

After expanding in Europe and other markets, Chinese car makers are now turning to Asian markets such as South Korea and Japan. According to market research firm CarisYou, BYD sold more than 20,000 cars in South Korea in the first nine months of the year, surpassing the combined sales there of Toyota and its luxury brand Lexus.

Analysts say rising demand for relatively affordable electric cars and higher fuel prices in South Korea have created favourable conditions for BYD. BYD is not alone; Chinese firms such as Geely, Chery and Xpeng are also working to expand their presence in the South Korean market.

Despite its success in South Korea, the situation for Chinese makers in Japan is comparatively difficult. Foreign brands account for only 6 percent of Japan's passenger car market. Strong local makers, the popularity of hybrid cars and negative sentiment toward China are obstacles there.

BYD began selling cars in Japan in 2023 and now has more than 75 dealerships in the country. Yet in the first nine months of this year it sold fewer than 4,000 cars there; BYD's share of Japan's total car market is only 0.1 percent.

To build a position in Japan, BYD has also entered the small car segment. Meanwhile EMT, a company backed by China's Chery, plans to bring a kei car to Japan in 2027 and also aims to produce cars locally.

The presence of numerous brands and fierce price competition in China's domestic car market have made doing business harder for makers. In this situation, companies are looking to foreign markets as a new area for growth and profit, using their technological capability, relatively low prices and large production capacity.