How Chinese EV Traders Are Beating Global Barriers With A Stealthy Tactic To Conquer New Markets

Chinese electric vehicle traders have found a way to export cars to new markets at a time when such products are facing strong trade barriers in key markets such as the United States.

What Happened: Chinese EV traders have discovered a loophole in the system, allowing them to export vehicles to new markets, reported Rest of World on Monday. 

The traders are taking advantage of a policy that permits used cars to be sold abroad without the carmakers’ authorization. This policy allows traders to register new cars in China before immediately shipping them overseas, effectively making the cars secondhand and thus available for export.

These traders are exporting trendy EV models from BYD Co BYDDF BYDDY, Li Auto LI to countries where Chinese EVs are not officially sold, such as Russia, Kazakhstan, and Saudi Arabia. The traders are even changing the EVs’ software language to English or Russian to cater to local markets.

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This trend is particularly evident in Russia, as per the report, where the departure of most foreign car brands due to the Ukraine war has led to a surge in demand for Chinese EVs.

Despite the increasing competition and shrinking profits, more Chinese dealers are joining the trade. Some traders are even expanding into the repair business to address the lack of official after-sales services for these exported cars, Rest Of World reported.

Why It Matters: Initiated by former President Donald Trump, the 25% tariff on Chinese auto imports has been a significant hurdle. This policy was further reinforced by President Joe Biden, who also excluded Chinese EVs from the advantageous “Buy America” credits.

Despite these challenges, Chinese EVs continue to gain traction globally, prompting a strategic meeting last month among China’s top automakers to discuss the future of the industry and its global ambitions.

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