The first half of 2026 has passed, a time for summary, review, and reflection. Amidst fluctuations in the global economy, Chinese auto exports have not slowed down; growth is accelerating.

This year, the total volume of complete Chinese car exports approached 5 million units, an increase of more than 60% year-over-year.

According to the consulting firm AlixPartners, China's car exports in 2026 are expected to break 10 million units, setting a historical record for the highest annual car exports from a single country. However, this 10 million unit overseas journey is far from smooth; global regional markets are showing vastly different landscapes and policies.

US Three-Tier Firewall

The US is the world's largest consumer market, but for a long time to come, Chinese cars may be excluded from it.

Many people think Chinese cars cannot enter the US due to high tariffs, but the reality is more complex. The US has effectively constructed a three-tier blockade system, almost completely severing ties with the Chinese automotive industry.

The first layer is tariff barriers. The US levies a 25% general tariff on imported cars, plus a 100% Section 301 tariff on Chinese EVs previously imposed, resulting in a combined tax rate exceeding 125%. For example, assuming the Li Auto i8 is exported to the US with an FOB price of $40,000, the tariff at destination would be $50,000, making the cost of these two items at least $90,000. In the US market, this price is sufficient to purchase the top-spec Cybertruck.

Besides tariffs, there are technology bans. In January 2025, the US released 'Rules for Intelligent Connected Vehicles', requiring that starting from the 2027 model year, connected car software designed, developed, or supplied by entities 'owned, controlled, or subject to the jurisdiction of' China or Russia be prohibited. Starting from the 2030 model year, connected car hardware is further prohibited. This rule not only looks at where the vehicle is assembled but penetrates to the source of software and capital.

Recently, Polestar became the first automotive brand affected by this. The US Department of Commerce refused to grant Polestar sales authorization, citing that 'vehicles equipped with relevant Chinese connected technologies may collect sensitive owner information and pose national security risks'. Therefore, Polestar had to announce a complete stop on selling new cars in the US starting from the 2027 model year, which is almost equivalent to exiting the US market.

Finally, there are legislative restrictions. In May of this year, the US Congress was still pushing for a stricter 'Connected Vehicle Safety Act', planning to elevate this temporary ban to permanent law, while sealing off traditional routes to evade sanctions such as 'transshipment through Mexico or Canada or building factories in the US'.

Therefore, against the backdrop of the US-China power game, the US market is likely the market with the greatest challenge for Chinese auto companies going global.

EU Doors Half-Open

The EU is the world's second largest new energy vehicle market, and a strategic high ground Chinese auto companies must secure.

Although the previous anti-subsidy investigation and tax increase bill drew wide attention, the EU's strategy did not take a 'one-stick-kill' approach, but adopted a relatively gentle gradual means, essentially a form of self-industry protection.

In early 2026, after more than two years of negotiations between China and the EU, the EU implemented a minimum price commitment mechanism for Chinese imported electric vehicles. This means Chinese pure electric cars do not need to pay extra high taxes to enter Europe, but must price according to EU rules and cannot enter the market at too low a price.

On the surface, it seems Chinese enterprises no longer need to pay high anti-subsidy taxes, keeping profits in their own hands; but in essence, the EU is using administrative means to level out the price advantage of Chinese EVs, limiting Chinese EVs from launching price wars in the European market. This means every model and every configuration must be separately calculated for the minimum price, greatly raising compliance costs.

Therefore, for Chinese auto companies to develop in Europe in the future, they can no longer rely solely on price advantages; they must promote deep localization.

In the future European market, the pure 'complete vehicle trade export' model will have little room to survive. Chery building a joint venture in Spain and BYD's Hungarian factory production are using real investment to exchange for entry tickets, which is actually consistent with China's earlier approach of introducing foreign enterprises.

Although the threshold is raised, as long as enterprises are willing to share value and create benefits locally, the market door remains open—just a door that is 'half-open'.

Southeast Asia Builds a Backyard Garden

Southeast Asia is the regional market with the most intensive investment and most significant results for Chinese auto companies. Thailand is a typical weather vane.

In January 2026, the Thai auto market welcomed a historical turning point. According to the Federation of Thai Industries, brand pure electric car sales in January reached 31,860 units, a year-on-year increase of 354%, accounting for more than 75% of Thailand's pure electric market share. On the brand sales list, Toyota ranked first with 19,113 units, BYD stayed firmly second with 12,812 units, Chery entered the top three with 9,714 units, and six Chinese brands collectively entered the top ten. Chinese brands' combined market share in Thailand reached 47.34%, historically surpassing Japanese brands' 47.338% for the first time.

Indonesia is another key market. By the end of 2025, the market share of Chinese brands in Indonesia doubled year-on-year to 14%, and BYD sales jumped to third place. In January 2026, Indonesia's new car wholesale sales were 66,447 units, a year-on-year increase of 7%. In the electric vehicle sector, Chinese market share reached as high as 91.7%.

Looking at the whole of Southeast Asia, the market landscape dominated by Japanese cars for sixty years is facing attacks from all sides. In 2025, Japanese car sales in Indonesia, Thailand, Vietnam and other six major countries declined by 22% compared to 2019, dropping to 68% in Thailand alone. Meanwhile, Chinese auto company sales in Southeast Asia exceeded 800,000 units in 2025, a year-on-year increase of over 120%, with average market share breaking through 35%. By the end of 2025, 7 Chinese auto companies had invested in building factories in Thailand, with cumulative investment exceeding $3 billion.

However, China's supply chain in ASEAN still has about 80% imported from China. Japanese car companies have not withdrawn, but switched tracks—Toyota invested 55 billion Thai Baht to expand hybrid production, local policies are shifting from focusing on pure electricity to technology neutrality. How to build a moat in local supply chain and product diversification is the next hard battle for Chinese auto companies in Southeast Asia.

Unexpected Opportunities in the Middle East

Chinese cars in the Middle East market are undergoing dramatic changes.

In the first two months of 2026, the UAE has jumped to the second position among Chinese car export destinations, with import volume reaching 103,900 units, a year-on-year increase of 53%. In 2025, China's car exports to the Middle East region reached 1.4 million units, of which the UAE's 570,000 and Saudi Arabia's 300,000 combined contributed more than 60% of the share. The economic report released by Saudi media in 2026 shows that Chinese car brand sales in the Saudi market are expected to exceed 120,000 units annually.

This way, the market share of Chinese brands in the Middle East has risen to above 20%, with proportions breaking through 25% in core markets such as Saudi Arabia and the UAE, among which Chery and BYD are the two largest Chinese enterprises.

The key variable promoting this growth is exactly the recent change in the situation in the Middle East region. The tense situation in the Strait of Hormuz made this traditional golden route nearly paralyzed, ship traffic volume plummeted from about 130 ships per day in February to only 6 ships in March. Toyota has already planned to cut export production to the Middle East by 24,000 units, Nissan continued production cut measures, and Mazda also confirmed that exports to the Middle East would be stopped before the end of May.

The delivery period of Japanese car companies has been greatly extended, while Chinese car companies quickly filled the market vacancy with stable supply chains and more competitive products. Another significant advantage of the Middle East market is ample funds, objective recognition of Chinese brands, and geographical location that can radiate to Africa and Europe. This is also a major unexpected pleasure of Chinese auto exports this year.

Stepping Stone to Latin America or New Market?

The Latin American market is becoming one of the fastest-growing regions for Chinese auto companies.

In the first half of 2026, the sales of Chinese brands in the 7 countries of South America were between 650,000 and 750,000 units, an increase of more than 80% year-on-year, and the market share also officially exceeded US and German brands, becoming the third largest car series in the market.

In March this year, the monthly sales of Chinese brand cars in Mexico reached 15,698 units, with a market share of 11.9%, surpassing German brands for the first time. MG sales surged 54.2% to 6,166 units, ranking rising to 7th place; Geely sales surged 245.3%. Brazil was the fastest growing single market. For the entire first quarter, China exported 166,787 passenger cars to Brazil, with a cumulative year-on-year increase of 242.8%. Brazil has become the country with the largest export volume of Chinese new energy vehicles.

But uncertainties facing the Latin American market are also rising. The US is pressuring Mexico to require it to limit the entry of Chinese cars into North America through the US-Mexico-Canada Trade Agreement. BYD has established sales networks in Brazil and Mexico and plans to build a factory in Mexico, but how long the 'Mexico stepping stone' can play a role largely depends on policy gaming between the US and Mexico.

The Overlooked Continent of Africa

Africa has 1.4 billion people, but the current car penetration rate is low, and most car companies did not fully pay attention due to consumption power limitations. But looking at the data from the first half of 2026, important trend changes are appearing in South Africa and North Africa.

The industrial orientation of core countries such as Egypt and South Africa is very clear; they vigorously encourage local assembly models, complete vehicle import tariffs are high, but imported parts can enjoy great tax incentives. So layout in Africa, similarly cannot expect to rely solely on complete vehicle exports to achieve profitability, the core logic is still 'industry exchanging for market'.

If enterprises can invest deeply to build factories locally and drive local employment with parts assembly, it is more promising to obtain long-term market entry tickets. Although there is limited premium space at present, there are still few Chinese auto companies willing to make long-term layouts here.

Russia: A Special Battlefield for Chinese Autos

Who is the largest national market for Chinese auto exports? It is Russia.

In the first quarter of 2026, China exported 186,765 passenger cars to Russia, with a cumulative year-on-year increase of 97.1%. From January to May 2026, Russia ranked first among Chinese car export destinations with a monthly import volume of 94,301 units. In 2025, the market share of Chinese independent brands in Russia rebounded to 57.2%, accounting for more than half.

The speciality of the Russian market lies in the huge market vacancy left by the mass exit of Western car companies, and Chinese brands quickly filled this gap. However, objectively speaking, geopolitical risks remain the 'Sword of Damocles' in trade between China and Russia.

Final Thoughts

Some predict that Chinese auto exports in 2026 will cross the 10 million unit threshold, which is undoubtedly a milestone achievement in the entire history of human industry.

However, we believe this number is not the higher the better, because the higher the number, the more challenging the road ahead. Chinese auto exports need to formally move from the 1.0 stage of purely pursuing sales to the 2.0 era of system output and supply chain output. And in this more mature stage, the competitive fire between Chinese auto companies will also extend comprehensively to overseas markets.

Looking around at the current global landscape, the automotive industry is irrevocably dividing into two camps: 'China Ecosystem' and 'Non-China Ecosystem'. In overseas markets, our biggest opponent may no longer be Toyota or Tesla, but those Chinese peers who are going global together to compete.

Regarding the accounting of Chinese cars going global, it can no longer be simply summarized by "how many units exported". How many units did Chinese independent brands actually sell overseas? Is it more profitable overseas? When joint ventures turn Chinese factories into export bases, is it an active choice or a retreat forced by fierce domestic competition?

Once May data came out, going global is no longer the "icing on the cake" of sales in our subconscious.

The point about Chinese cars going global that is most easily underestimated or misunderstood is: for many automakers, overseas sales are no longer supplementary items in financial reports, but part of the survival structure.

According to currently published monthly quick-report data for automakers, for example, Chery Group's total sales in May were about 247,800 units, of which exports were about 181,900 units, with the export ratio actually exceeding 70%; cumulative exports from Jan-May were about 750,000 units. This fully indicates that Chery is no longer "selling cars domestically, getting extra credit overseas", but has essentially formed the main overseas battlefield.

Similarly, BYD's changes are also very obvious. In May, BYD's global sales were 383,500 units, overseas sales 160,600 units, a YoY increase of 80.4% (domestic sales decreased YoY by 24%). "What is lost in one direction is gained in another"; overseas is factually hedging the domestic market pressure for BYD.

Looking further out, SAIC overseas market, Geely exports, Changan overseas, Great Wall overseas are all rising. Chinese cars going global is no longer a few brands charging out, but a coordinated force going global. However, how exactly this "going global" is calculated, let's first break it down clearly.

The first account: Exports do not equal overseas sales.

Is Chery number one? Has BYD surpassed it? Does SAIC MG count as a Chinese brand?

The existence of these questions is actually not key to ranking, but to statistical scope.

The first type is called Chinese Auto Export. This is the customs or industry statistical scope. As long as complete vehicles go out from within China, it counts as Chinese auto export. This includes Chery, BYD, Geely, Changan, Great Wall, but also includes Tesla Shanghai Factory, Volvo China Factory, and includes more and more joint venture brand China-made models in the future.

The second type is called Chinese Independent Brand Overseas Sales. This is closer to what we usually say "how many cars Chinese brands sold overseas". For example, Chery, BYD, MG, Lynk & Co, Haval, Changan, Deepal, etc.

The third type is called Overseas Local Production and Sales. For example, Chery is promoting production layout in Spain, South Africa, Indonesia, Brazil, etc.; BYD is building factories in Thailand, Brazil, Hungary, Indonesia, etc.; SAIC plans to build an EU factory in Spain. This part may not enter "Chinese Export" in the future, but also belongs to Chinese automaker global sales.

Therefore, to truly look at Chinese cars going global, you cannot just focus on the number of ships loading at the port. A more accurate calculation should be: Chinese Export Complete Vehicles + Chinese Brand Overseas Local Production Sales + Overseas Terminal Registrations of Brands Controlled by Chinese Capital.

The second account: Is Chery number one?

Looking at the second point above: "Chinese Independent Brand Complete Vehicle Export", Chery must be number one.

Chery's strength is not a sudden explosion, but an early start. It started exporting around 2001, long-term deep diving into Russia, Middle East, Latin America, Eastern Europe, South Africa and other markets. In 2025, Chery's annual sales were 2.8064 million units, of which exports were about 1.344 million units.

Overall, Chery's export advantages are roughly three points.

First, the internal combustion engine basic base is still there. Not every place in the world is suitable for pure electric. Middle East, Latin America, Africa, Eastern Europe, many markets need cheap, durable, large space, high configuration fuel SUVs more.

Second, the channel is very deep. The hardest part of going global is not selling the car, but there are people to repair when the car breaks, people to do finance, people to manage spare parts, and people to take over used cars.

Third, the product matrix is wide enough. Chery, Jetour, Exeed, iCAR, Omoda, Jaecoo, plus hybrid and fuel SUVs, it is not a single brand going global, but multi-layer shelf going global.

So, calling Chery the Export King is not empty at all.

The third account: Who is the Hidden Champion?

If we change the statistical method, calculating by new energy going global, BYD is quite a sharp knife.

BYD's overseas sales started rising rapidly from 2025, the 2026 target is more aggressive, internally formulated overseas sales target is above one million units, and hopes overseas eventually approach half of overall business.

Assuming we change to another statistical scope that everyone cares about, "European Presence", SAIC MG and Geely actually look more like Hidden Champions. From Jan-Apr 2026, Geely brand registration share in Europe was about 2.5%, SAIC about 2.4%, BYD about 2.2%, Chery about 2.0%. This shows that in Europe, Chinese automakers are not leaving everyone in the dust, but a multi-brand fleet; especially, SAIC relied on MG to eat up a long stretch of European channel dividends.

There is also a "Hidden Export Champion" that is easily overlooked: Tesla China. In May, Tesla Shanghai Factory Model 3 and Model Y deliveries were 86,000 units, including vehicles exported to Europe and other markets. Although it is not a Chinese brand, it proves one point: China manufacturing has become an efficient production base for global automakers.

The fourth account: Is it more profitable overseas?

For many Chinese brands, overseas is indeed more profitable than domestic. Domestic price war has already pressed automaker profits very thin. In fact, many domestic models have long ceased thinking about making money by selling cars, but are changing enterprise scale, market share, capacity utilization. One sentence: To survive.

Overseas is different. First, terminal selling price is higher; Second, competitor configurations are not so rolled; Third, consumers' perception of "high configuration low price" is stronger; Fourth, some markets have not fully entered the new energy fierce battle stage.

But overseas is not all gold everywhere. Freight, tariffs, certification, channel rebates, financial costs, after-sales spare parts, local teams, exchange rate fluctuations, will eat up part of the profits. Especially in the initial CKD, KD assembly, or even factory ramp-up stage, profits are simply non-existent.

Overall: BYD's overseas profit elasticity might be highest, because new energy vehicles in Europe, Southeast Asia, Latin America still have brand premium space. And Chery's overseas profit is more like "stable cash flow", relying on fuel SUVs and hybrid SUVs to move volume. SAIC MG and Geely's value lies in European channels and brand identity, for capital, strategic weight is very high.

The fifth account: Do joint venture brands benefit from using Chinese exports?

Beneficial, but there is helplessness behind it.

The beneficial place is, Chinese supply chain efficiency is too high. Batteries, motors, electric control, glass, seats, infotainment, molds, logistics, the whole industrial chain is in China. For brands like Tesla, BMW, Volvo, Volkswagen, Hyundai, using Chinese factories as export bases can dilute costs, increase capacity utilization, and also bring China speed to overseas markets.

But the helplessness is also obvious. Joint venture brands' sales pressure in China is getting bigger and bigger, fuel car capacity utilization is dropping, new energy transition is not catching up to independent brands. If the Chinese market cannot absorb these capacities, exports become a pressure valve, large amounts of fuel car capacity need to find external exports.

This is both cost reduction and efficiency increase, and also self-rescue. In the past, China was the largest profit pool for foreign brands, now China is turning into their global manufacturing workshop.

The sixth account: Is Chinese cars going global at a terrifying level?

Looking at the scale, it is indeed terrifying.

In 2025, Chinese auto exports exceeded 7 million units, continuing to remain number one globally; in April 2026, Chinese passenger car exports were about 796,000 units, a year-on-year surge of nearly 85%, of which new energy passenger car exports were about 420,000 units, year-on-year over 120%.

However, saying Chinese cars have already "ruled the world" is still premature.

European market, Chinese automakers share is still low single digits. US market is blocked by high tariffs. Canada, Mexico, EU, Turkey, Brazil, Russia and other places, will use tariffs, quotas, localization requirements to re-price Chinese car advantages.

Therefore, face Chinese automakers' bold exploration of the world, do not just focus on how many units are exported in a single month, but should see that Chinese automakers have completed three upgrades:

First, from low-price fuel car export, become fuel, hybrid, pure electric going global together.

Second, from single car export, become brand, channel, finance, after-sales going global together.

Third, from China manufacturing export, become overseas factory, local employment, local supply chain landing together.

Cars are just the prow, following behind are factories, supply chains, algorithms, channels and finance.

Let's make a summary——

Overseas market is not a lifeboat for Chinese automakers, but a second growth curve for China's auto industry chain; but it is absolutely not a guaranteed win. The future going global competition is no longer about loading more ships at the wharf, but who can survive locally, repair well, sell at high prices, and have stable reputation.

True globalization is not just selling cars overseas, but also seeing whether the whole set of ecosystems created by the Chinese automotive forces can be successfully exported overseas.