After years of sustained growth, the electric vehicle (EV) market suffered a significant setback in 2024, witnessing a decline in pure EV exports. However, leveraging the strength of plug-in hybrid electric vehicles (PHEVs) in the export market, China's EV exports managed to maintain a modest growth trajectory, with fuel vehicles continuing to dominate China's global automotive exports.

Data from the first 11 months of 2024 reveals that China's auto exports surpassed 5 million vehicles, with an anticipated annual export volume of 5.8 million vehicles, marking an 11.1% increase from the 5.22 million vehicles exported in 2023. This notable slowdown in growth is primarily attributed to the decline in pure EV exports.

During the first 11 months, pure EV exports amounted to 894,000 units, a year-on-year decrease of 10.8%. Conversely, PHEV exports surged 1.8 times to 246,000 units, totaling 1.14 million units.

Fuel vehicles remain the backbone of China's auto exports, maintaining a relatively robust growth rate. In the first 11 months, fuel vehicle exports reached 4.203 million units, an increase of 267,000 units compared to the previous year.

The decline in EV exports is due to Europe's increased tariffs on Chinese EVs. Nonetheless, Europe's favorable stance towards PHEVs has significantly bolstered China's PHEV exports, driving rapid growth in the European market.

China's fuel vehicle exports primarily target emerging markets, with Russia and Brazil as key destinations. These markets have shown less demand for China's new energy vehicles than anticipated, with Chinese fuel vehicles captivating consumers with their affordable prices and superior configurations.

Hybrid technology has suddenly gained traction in European and American markets. In Germany, hybrids account for 38% of the automotive market share, while the US market is also increasingly embracing hybrid technology. In contrast, Tesla, an American EV company, is performing less impressively in the US market, with EVs accounting for only 7% of the US automotive market. Americans prefer Japanese fuel-efficient hybrid technology over EVs.

The development of pure EV technology in European and American markets has been hampered by ongoing range anxiety associated with EVs. The vast size of the US market, coupled with relatively low gasoline prices and high electricity prices, fails to offer significant cost savings for pure EVs.

Japan's fuel-efficient hybrid technology strikes a balance between cost savings and range. Toyota's fuel-efficient hybrid technology reduces fuel consumption to just over 4 liters, making the operating cost of fuel vehicles sufficiently low and meeting local demand for energy-saving technology. This has led to a doubling of Toyota's sales in the German market and a 14% increase in sales in the US market during the first half of 2024.

China's PHEV technology has gained a foothold in the European market. Hybrids account for nearly 40% of the German automotive market share, with over 10% being PHEV technology. As their technology matures, Chinese automakers developing PHEV technology have established a firm presence in the European market.

Consequently, China's PHEV technology is now in direct competition with Japan's fuel-efficient hybrid technology. While Japanese hybrid technology still holds an edge, the emergence of PHEVs in the European market offers hope to the Chinese automotive industry.

The automotive industry, a vital component of high-end manufacturing, influences a lengthy industrial chain. China's auto exports to the international market have paved new avenues for Chinese manufacturing to go global, driving the transformation and upgrading of Chinese manufacturing. China has surpassed Japan to become the world's largest auto exporter, encouraging Chinese automakers to accelerate technological upgrades and develop new automotive technologies while consolidating fuel vehicle exports.