Export Quality Over Quantity—China’s Government Regulates EV Exports

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Due to overproduction and competition, Chinese car manufacturers are increasingly pushing into foreign markets. However, recently questionable export practices have made headlines. Now, the Chinese government is stepping in.

China is introducing export licenses for electric vehicles (EVs) for the first time. Starting January 1, 2026, companies that want to sell pure electric cars abroad will need to apply for such a license, the Chinese Ministry of Commerce and three other agencies announced simultaneously at the end of September.

 The new licensing system aims to “promote the healthy development of trade in new energy vehicles,” according to the official announcement. In China, the term “New Energy Vehicles” (NEV) primarily refers to electric cars and hybrids, as well as vehicles with alternative drives like fuel cells.

Licensing requirements for combustion engine cars, plug-in hybrids, and range extenders (EREVs, or “Extended Range Electric Vehicles”) had already been introduced earlier.

China’s Government Regulates

The background for this measure is, on one hand, the rapid growth of Chinese car exports, and on the other, Beijing’s decision to gradually shift industrial production from volume growth to more value creation, from “quantity to quality.”

The rapid growth in an increasingly important sector of the Chinese economy could be temporarily slowed down by the new licenses. However, this is explicitly accepted. Neither the Chinese government nor many domestic car manufacturers want to continue as before.

Car Exports Multiply Sixfold

In recent years, not only has the absolute number of vehicles China exports grown significantly, but their relative share of the country’s total exports has also increased. In 2020, car exports were still a tiny category in China’s customs statistics, with around one million vehicles exported. By the end of 2024, this number had already risen to 6.4 million. Thus, exports have increased sixfold within five years.

This very strong, almost explosive growth is continuing at present. From January to August, China exported nearly 4.3 million vehicles, marking a 13.7 percent year-over-year increase. For the entire year of 2025, seven million exported vehicles are forecast—a new record.

Rising Exports Bring Problems

At the same time, the share of NEVs in the total exports of the Chinese automotive industry has increased. They have “gradually replaced vehicles with traditional fuels as the main driver of export growth,” writes the Gasgoo Research Institute in a recent analysis. In the first eight months of this year, China exported 1.5 million NEVs, nearly doubling that number within one year.

However, this rapid growth has also been accompanied by a series of “teething problems” in car exports. One example is the export of new cars misleadingly classified as used vehicles, so-called “zero-miles used cars” (we reported on this earlier).

Questionable Used-Car Practices

Dealers registered mailbox companies, under whose names vehicles were briefly registered, so they could then be legally exported as used cars at any price. While price wars in China squeezed margins, the new cars dumped abroad as “used vehicles” were still more profitable for manufacturers and dealers than the margins achieved in China. Sometimes it was simply about reducing inventory.

This is by no means the main reason for the success of Chinese car exports, but the Chinese government is thinking long-term and fears that such practices could damage the image of the domestic auto industry. And they do, since the gray-market dealers cannot offer software updates or any aftersales service.

It is against this backdrop that the export licenses have been introduced. The goal is to steer China’s car exports “onto a healthy development path without disorderly price wars and insufficient aftersales service,” quotes the Chinese economic portal Caixin, citing Sun Xiaohong, Secretary-General of the Auto Branch of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products.

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