China’s passenger car exports jumped 73% year-on-year in May to about 809,000 vehicles, while domestic sales fell for the seventh straight month. Higher gasoline and diesel prices linked to the war in Iran are boosting interest in electric vehicles as Chinese
For China’s automakers, May arrived with a loud message: export momentum is accelerating while home-market demand keeps slipping.
Passenger car exports rose 73% year-on-year in May to around 809,000 vehicles, according to data from the China Association of Automobile Manufacturers. That compares with about 796,000 passenger cars exported in April.
The shift is especially sharp in electric vehicles. Exports of “new energy vehicles” — including pure EVs and plug-in hybrids — more than doubled from a year earlier in May to about 435,000 passenger cars. Together, they accounted for more than half of all passenger-car exports.
Higher gasoline and diesel prices, driven by the war in Iran, are helping fuel interest in electric vehicles, the report said. For automakers watching demand soften at home, it’s a powerful mix: EVs are drawing attention globally just as domestic incentives have been scaled back.
Domestic passenger car sales in May fell 23.4% year-on-year to 1.44 million vehicles, marking the seventh straight month of year-on-year declines. Cars powered by internal combustion engines — including gasoline and diesel vehicles — fell nearly 42% from the year before as the share of EVs grew.
The pressure on China’s car market shows up in how analysts talk about where the next growth will come from. Paul Gong. head of UBS’s China automotive industry research. said the high oil price translated into “further higher interest on the EV.” He also said China’s car exports had been stronger than expected in the first few months of the year. while domestic car sales were weaker than expected.
UBS expects China’s annual passenger car exports to rise about 40% in 2026 from a year earlier. EV exports could increase by about 80%.
Claire Yuan. an auto analyst at S&P Global Ratings. expects exports to keep strong momentum through 2026 and forecasts year-on-year growth of 30% to 50% for passenger car exports. She also expects China’s car sales could pick up in the second half of the year as buyers step up purchases after automakers launch fresh lineups.
Worldwide, the broader EV trend is still moving in China’s favor. Roughly one in four new cars sold globally last year was electric. according to the International Energy Agency’s latest annual global EV outlook released in May. The IEA said EV sales could reach 23 million and make up nearly 30% of all cars sold in 2026. even though the year has gotten off to a more sluggish start.
China remains the core of that supply chain. It is the world’s largest producer of EVs, providing the majority of EVs sold worldwide.
BYD has become a symbol of how aggressively Chinese brands are pushing outward. BYD, China’s largest EV maker, sold over 160,000 vehicles abroad in May, up 80% from the year before. The company aims to sell 1.5 million vehicles overseas this year, up more than 40% from last year’s 1.05 million. BYD overtook Tesla last year as the world’s biggest EV maker by sales.
Export expansion also carries a business logic that goes beyond growth. Yuan said selling more cars overseas may generate better profitability for Chinese carmakers as a price war in China last year eroded profitability for many automakers.
The numbers from May make the trade-off hard to miss: more vehicles leaving China, and fewer being sold at home — with EVs increasingly at the center of both stories.
China car exports May 2026 electric vehicles EV exports new energy vehicles BYD UBS S&P Global Ratings International Energy Agency Iran oil price