China is flooding emerging and secondary markets with millions of gasoline cars left unsold at home where EVs are pushed instead, Reuters reported on Tuesday.
Reuters explained China’s has rapidly shifted towards electric vehicles (EVs), which now represents half of its entire domestic market. The shift has in turn affected sales of “legacy” gasoline-powered carmakers — who are now “flooding” the world with the units that go unsold at home.
“While Western policymakers have focused on the threat of China’s heavily subsidized EVs, protecting their markets with tariffs, U.S. and European automakers face greater competition from China’s gas-guzzlers in countries from Poland to South Africa to Uruguay,” Reuters detailed.
The report, citing data from the China-based consultancy group Automobility, states that since 2020, gas-powered vehicles have accounted for 76 percent of China’s auto exports, with annual shipments jumping from one million to more than 6.5 million this year.
The surge in vehicle exports is largely-driven by “the same EV subsidies and policies that wrecked the China businesses of automakers including VW, GM and Nissan” that, a Reuters examination found, ignited a “devastating price war.” Chinese state-owned carmakers such as SAIC, BAIC, Dongfeng, and Changan stand among the top companies exporting their unsold surplus units.
“The phenomenon highlights the far-reaching impacts of Chinese industrial policy, as foreign competitors struggle to keep pace with government-backed firms chasing Beijing’s goals to dominate critical sectors nationally and globally,” Reuters stressed.
Reuters stated there is “no question that, for now” gas-powered cars are selling better in “second-tier” markets such as Eastern Europe, Latin America, and Africa, where EV-charging infrastructure is not as prevalent as in other markets. Beijing’s long term goals, Reuters stressed, is to dominate EVs and plug-in hybrids locally, but in the interim, “many Chinese automakers are building overseas brands by giving customers whatever they want.”
The ongoing flooding of those markets with unsold Chinese vehicles is in turn creating intense competition and pressure for global carmakers and local industries, with “legacy” brand Fiat, Ford and Chevrolet losing ground — particularly in Mexico, China’s largest export destination and one that is “uncomfortably close” for the United States.
“U.S. officials have pressured Mexico to restrict trade with China to prevent it from using Mexico as a ‘back door’ around U.S. trade barriers,” Reuters said, noting that Mexico raised tariffs on Chinese cars from 20 to 50 percent in September.
Chinese carmaker Chery, one of the companies experiencing a surge in sales of exported gas-powered vehicles, went from 730,000 units sold in 2020 to 2.6 million in 2024. Dongfen went from nearly 250,000 in 2024, an “almost four-fold” jump in five years. The company’s Central Europe manager Jelte Vernooij told Reuters that the surge proved “critical” as sales of its China partnerships with carmakers Honda and Nissan entered a “downward spiral.”
“The fact that we’re state-owned is key,” Vernooij said. “There’s no question that we will survive.”