Credit: Vinh Dao via Canva.com China exported more than 6.2 million passenger cars in the first eight months of this year, beating its full-year total for 2025 with four months to spare, while domestic sales fell 25.6% in August. Europe absorbed much of the growth through plug-in hybrids, which the EU’s tariff on Chinese cars does not cover, and BYD’s Hungarian plant reaches mass production this quarter. China exported more than 6.2 million passenger cars in the first eight months of this year, beating its full-year total for 2025 with four months to spare, the Associated Press reported. August alone accounted for about 890,000, up 67.1% on a year earlier.
Domestic sales went the other way. Fewer than 1.5 million cars were sold in China in August, a fall of 25.6%. The pattern is not new. TNW reported in July that Chinese car sales had fallen 20% in the first half, the worst stretch since 2021.
What is new is the size of the offset. S&P Global Ratings expects full-year passenger vehicle exports to grow by 50% to 70%. “Strong export growth will largely mitigate the domestic weakness,” Stephen Chan of S&P Global told the news agency. Europe is where much of it lands. Chinese marques took a record share of the European market in June, 10.9% on 150,272 registrations, up 118% year on year, according to Dataforce.
The EU has a tariff for this. It covers battery electric cars, at up to 35% on top of the standard 10% duty, and has been in force since October 2024. The rates are set per manufacturer and attach to where a car is built rather than to the badge on it. A European brand shipping from a Chinese plant pays them too.
They do not cover plug-in hybrids. That is where the growth went. Chinese brands took 28% of Europe’s market for plug-in hybrids in the first half, and the BYD Seal U pushed Volkswagen’s Tiguan down to fourth place. The Commission has been preparing duties on Chinese plug-in hybrids since June, Handelsblatt reported.
Nothing has been imposed. The rates would be lower than on battery cars in any case. A plug-in hybrid carries a smaller battery, so less of its value comes from the part the subsidy case rests on. Time is also running short for the tariff to matter to the largest exporter.
BYD’s plant at Szeged in Hungary is due to reach mass production this quarter, building the Dolphin Surf. Cars built in Hungary are European cars. By the time Brussels closes the plug-in hybrid gap, the company it is aimed at may be assembling inside the wall.
