Fuel Prices Roaring, China's Electric Car Exports Explode as Domestic Market Drags

JAKARTA - The surge in fuel prices amid the Iran conflict has brought blessings for China's electric car exports. The Straits Times, quoted on Friday, April 10, reported that when the cost of filling the tank rose and made consumers think again, the delivery of electric and hybrid vehicles from China in March actually soared to a record high.

Citing data from the China Passenger Car Association (CPCA) released on April 9, The Straits Times said China's EV and hybrid exports jumped 140 percent compared to the same period last year to 349,000 units. BYD accounted for about a third of total exports. Geely Automobile Holdings and Chery Automobile followed behind.

The increase in fuel prices has made consumers in a number of countries look again at electric and hybrid cars. In the past month, showrooms in various Asian countries have reportedly been busier. Many buyers are looking for vehicles that are considered safer from fuel price fluctuations.

The stock market quickly read this situation. BYD shares listed in Hong Kong rose as high as 3.1 percent on April 10. Geely and Chery shares also strengthened, along with the uncertainty of the truce that continues to shake the energy market.

From the UK, the signal is the same. Data released in early April showed that electric car sales in the country set a record in March. CPCA Secretary General Cui Dongshu said the crisis in the Strait of Hormuz could be a quick way for Chinese manufacturers to expand the market. "Chinese car manufacturers can quickly expand their global reach during the Strait of Hormuz crisis," he said, as quoted by The Straits Times.

But the surge in exports covered up unfinished problems at home. China's automotive market is still sluggish. Shipments from Tesla's factory in Shanghai rose about 9 percent compared to a year ago, but Tesla's sales in China fell 24 percent. BYD's domestic sales even fell more than 40 percent.

In total, sales of EVs and hybrids in China fell 14 percent to 848,000 units in March. That was the third consecutive month of decline. In the first quarter, this was the first decline for the January-March period since 2020.

March data also provides a clearer picture because it is no longer influenced by the Chinese New Year holiday. According to Cui, the weakening was triggered by rising costs and declining consumer purchasing power. Restrictions on exchange subsidies also put pressure on sales of cheap compact sedans and hatchbacks, with delivery declines reaching 25 percent.

The increase in fuel prices has given a boost to China's electric car exports. But in the domestic market, the story is different. Weakening purchasing power and subsidy restrictions are still weighing on sales.