China's global EV push reflects its ambition - and harsh economics at home

BEIJING — From robotaxis to flying cars, China is working to export more of its cutting-edge vehicle technology — a strategy that reflects both its global ambition and hard economic realities.

The world's second-largest economy is home to the world's biggest and most advanced car market. But a multi-year price war has left the country with a surplus of vehicles, including electric ones mass produced by companies that are unknown in the West.

China's car sales fell by 18 per cent in the first quarter from a year earlier and are expected to remain flat or down for the foreseeable future.

Foreign markets offer the promise of higher margins and meaningful growth in sales volume, analysts and industry watchers say. That means the outlook for global growth will be a focus for China's annual auto show that starts on Friday in Beijing.

Chinese exports have already grown

Already China's exports grew significantly last year when it exported 5.8 million cars, almost 20 per cent more than a year earlier, according to industry data.

Overall vehicle exports from China, including cars and commercial vehicles, are expected to grow 4 per cent to 7.4 million this year, a forecast from the China Association of Automobile Manufacturers released on Thursday found.

"They've reached a point where they know it's not just about China," said Pedro Pacheco, an analyst at research firm Gartner, speaking about Chinese automakers.

"They also need a roadmap to deploy technology in Europe, in Latin America, in Southeast Asia."

Chinese EV brand Aito, which is backed by technology giant Huawei, is among those targeting overseas growth. Aito aims to more than double its annual sales to 1 million vehicles by 2030, Chairman John Zhang told Reuters.

Zhang said Aito, owned by Chongqing-based carmaker Seres Group 601127.SS, expects overseas sales to account for 20 per cent of total volumes within the next three years, up from less than 1 per cent currently.

The company plans to enter some northern European markets this year, where EV adoption is higher.

Competitive in spite of European tariffs 

The US is for now effectively closed to Chinese cars.

Chinese EVs are also subject to tariffs in Europe, but they can still be competitive there, making European markets appear a focus for Chinese EV makers.

Increasingly, Chinese-made autos meet the needs of overseas drivers, analysts say.

"China is not an emerging country in the auto industry. It's a top country, at the top level," Francois Roudier, the secretary general of the International Organisation of Motor Vehicle Manufacturers, a global industry group, told Reuters in Beijing.

US consumers, too, have become more interested in Chinese vehicles, according ​to surveys, although the barriers to selling there include tariffs of around 100 per cent.

Earlier this month, three Democratic senators urged President Donald Trump to bar Chinese automakers from building vehicles in ‌the US and to prevent Chinese cars assembled in Mexico or Canada from entering the country.

In January, Trump said he was open to Chinese automakers building vehicles in the US

He is due to meet with Chinese President Xi Jinping at a summit next month. The economic and trade relationship with China is stable and Trump will seek to keep it that way, US Trade Representative Jamieson Greer said earlier this month.

'Flying cars' and humanoid robots

EV maker Xpeng expects to start large-scale production of its "flying" cars next year and of its humanoid robots in the fourth quarter of 2026, President Brian Gu told Reuters on Thursday.

Xpeng has received more than 7,000 orders for its flying cars, able to fly as well as to be driven on roads. Most of the orders are for China, where the company is working on obtaining approval from the country's aviation authorities.

It also plans to start robotaxi tests in the southern city of Guangzhou this year, Gu said, adding that 2027 will be a "critical year" for "tests around the world with partners."

Last year, Xpeng generated around 15 per cent of its revenue from overseas sales. In the next five to 10 years, "more than 50 per cent of the revenue should come from outside of China," Gu said.

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