China's electric vehicle industry is increasingly looking beyond its borders as domestic market growth begins to slow. In February, BYD passed a symbolic milestone, exporting approximately 100,600 vehicles abroad, accounting for about 53% of its total sales that month. For the first time, exports surpassed domestic deliveries.

This shift is not accidental. Price wars, shrinking profit margins, and more cautious domestic spending have forced manufacturers to re-evaluate where their next phase of growth will come from.

Great Wall Motor is also experiencing a similar situation. Of approximately 72,600 vehicles sold in February, more than 42,600 units were delivered overseas.

Until recently, China's massive domestic market absorbed the bulk of the industry's output. Now, the balance is shifting. Automakers who once focused almost exclusively on the domestic market are now building their future in overseas markets.

Chery export vehicles at a seaport in Jiangsu province, China, 12/1. Photo: AFP

Exports are no longer a secondary business; they are quickly becoming a key strategic factor. Industry data shows Chinese automakers exported more than 2,6 million vehicles overseas in 2025.

This expansion demonstrates effective cost control, a mature battery supply chain, and rapid production scalability. In many emerging markets, Chinese electric vehicles are competitively priced, giving them a distinct advantage over established competitors.

Meanwhile, domestic challenges are making business in the home market increasingly difficult. Government incentives have decreased, competition is intensifying, and buyers are taking a more cautious approach to major purchases.

As prices stabilize and the early adoption phase subsides, the pace of domestic sales growth has slowed. Companies accustomed to China's immense demand for new energy vehicles need to seek new sources of demand elsewhere.

Southeast Asia, Latin America, and the Middle East have become key targets. In some countries, such as Thailand, Chinese electric vehicle brands have transformed from minor players into formidable competitors in just a few years. These markets tend to have lower trade barriers and are seeing growing interest in affordable, low-emission vehicles. That combination has created space for explosive growth.

However, there are still risks associated with aggressive export drives. Trade tensions in Europe and North America have led to higher tariffs and stricter regulations. This reduces profit margins and complicates long-term planning. Automakers are responding by investing in overseas factories, distribution networks, and after-sales services to secure a long-term position rather than just short-term sales surges.

In Southeast Asia, a wave of new factories will begin producing Chinese electric vehicles in 2026, as Chinese firms build assembly lines across the region in a broader effort to expand overseas, according to the Straits Times.

BYD expects to begin production at its new factory in Indonesia in Q1 2026, and at an assembly plant in Malaysia by year-end, adding to its existing factory in Thailand and a smaller plant in Cambodia.

Chery is expected to open a factory in Vietnam in the second half of 2026. The company also aims to complete the construction of a new production facility in Malaysia in 2026, specializing in electric vehicles, hybrid vehicles, and traditional gasoline-powered cars.

These two companies are among the Chinese electric vehicle manufacturers intensifying their production expansion in Southeast Asia, as regional governments attract investment to boost their automotive industries.

My Anh