According to the Global EV Outlook 2025, which was published on May 14, 2025, China leads global electric car exports in 2024, demonstrating its dominance in the EV sector. Adoption in emerging markets has been dramatically accelerated by low-cost Chinese EV models, which have reduced the cost differential with internal combustion engine (ICE) vehicles. With prices that are frequently competitive with those of traditional cars, the paper highlights how Chinese original equipment manufacturers (OEMs) have increased the accessibility of EVs in nations including Brazil, India, Indonesia, Mexico, and Thailand. However, this expansion is being hampered by new trade laws and tariffs implemented in 2024, which are forcing Chinese OEMs to increase their production abroad to stay competitive.

Affordable Chinese EVs Drive Adoption in Emerging Markets

Chinese EVs, which provide affordable substitutes for internal combustion engines, have revolutionized emerging markets. Over 80% of battery electric cars sold in Thailand in 2023 and 2024 were imported from China, driving EV prices down to comparable levels of traditional vehicles. China leads Global Electric Car Exports in 2024, and in Thailand, the average cost of a Chinese EV in 2024 was even less than that of a conventional vehicle. Similar trends were observed in Brazil, where Chinese EVs accounted for 85% of EV sales in 2024, up from 60% in 2023, while the price difference between battery electric and internal combustion engine automobiles decreased from over 100% to barely 25%. The cheapest battery electric versions sold for about the same price as the least priced ICE models in markets including Thailand, Mexico, and Indonesia. However, Chinese imports were restricted below 15% of EV sales in India in 2024 due to hefty import levies and reasonably priced domestically produced EVs, demonstrating the diverse effects of local policies on market dynamics.

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Tariffs and Overseas Expansion Reshape China’s EV Strategy

In 2024, several regions imposed taxes on Chinese EVs, reducing their competitiveness despite China’s export supremacy. While the US and Canada imposed tariffs above 100%, with the US preparing additional rises in 2025, the EU applied OEM-specific countervailing levies to offset alleged subsidies; additionally, in response to the spike in Chinese EV imports, Mexico and Brazil authorized tariff increases. To avoid tariffs and supply local markets directly, Chinese OEMs have been forced by these trade impediments to set up production facilities abroad. For example, BYD has established operations in Brazil and Turkey to sell to the EU. According to the estimate, over 160,000 EVs were produced in 2024 by Chinese OEMs’ foreign production capability, primarily through Volvo Cars in the EU. This capacity is anticipated to quadruple to almost 4.3 million vehicles annually by 2026, with nearly half of these new facilities in Europe and Southeast Asia. However, increasing tariffs may raise the cost of EV batteries and components, which might reverse the notable cost reductions observed since 2015 and affect the adoption of EVs worldwide.

This change in trade patterns demonstrates Chinese OEMs’ adaptability and tenacity in navigating a challenging global market. Although the proliferation of EVs in emerging economies has been fuelled by their affordable models, the changing tariff landscape may challenge the affordability that has caused this surge. Sustaining their dominance in the global EV industry will depend on Chinese manufacturers’ capacity to keep prices low while satisfying rising demand as they grow internationally.

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