China, the world’s largest auto market and car exporter, is about to implement a sweeping change that could reshape the global electric vehicle (EV) landscape. Starting January 1, 2026, Chinese automakers will be required to obtain export permits to ship electric vehicles abroad—a move the Ministry of Commerce says is designed to promote the "healthy development" of the new energy vehicle trade, according to reporting from the Associated Press and Bloomberg.
This new regulation brings EV exports in line with the existing rules for gasoline vehicles and motorbikes, which already require such permits. The Ministry of Commerce emphasized that these controls are not intended to stifle growth, but to ensure the sector’s sustainable and responsible expansion. "The export licenses are intended to promote the healthy development of the new energy vehicle trade," the ministry stated in its official release on Friday.
China’s EV sector is a global powerhouse, exporting about 5.5 million vehicles in 2024 alone, with nearly 40% of those being electric, according to the Associated Press. The country’s electric car exports reached 1.65 million units last year, nearly doubling the figure from 2022, Reuters reported. At home, the appetite for electric vehicles has soared: in the first half of 2025, EVs accounted for more than half of all passenger vehicle sales, setting a new domestic record.
But this rapid growth hasn’t come without headaches. The United States and European Union have imposed tariffs on Chinese-made EVs, arguing that generous government subsidies give Chinese manufacturers an unfair edge. As these international pressures mount, Beijing is also grappling with internal challenges—chief among them, oversupply and an increasingly cutthroat price war among domestic EV makers.
Earlier in 2025, industry giant BYD ignited a fresh round of price cuts, a move quickly echoed by competitors. This race to the bottom, critics say, has sparked what’s known in China as “involution”—a kind of self-defeating competition where companies battle for market share without creating real value. Wei Jianjun, chairman of Great Wall Motors, didn’t mince words when he warned, "The industry could come under threat if it continues on the same trajectory." His concerns echo across the sector, as manufacturers scramble to outdo each other in both domestic and overseas markets.
One major pain point has been the proliferation of unregulated exporters. Since 2019, local governments have supported a surge of traders who ship new cars overseas as "used" vehicles. This workaround helped absorb excess inventory and, perhaps not coincidentally, artificially boosted local GDP figures, Reuters noted. However, these exports often land in foreign markets without adequate after-sales support—leaving customers stranded and damaging the reputation of Chinese brands abroad.
Wu Songquan, director of the policy research office at the China Automotive Technology Research Center, highlighted the risks of this approach. "Concerns exist about unauthorized exporters shipping EVs to markets without established after-sales services, damaging user experience and brand reputation," Wu wrote in a recent article. He added, "Just as major international brands have earned global trust through high quality, Chinese automakers should establish standardized processes and achieve high-quality exports in their independent operations."
The new export permit system will require that only automakers and their authorized companies can apply—a rule already in place for gasoline and hybrid vehicles. This is intended to clamp down on the so-called "gray market" traders and ensure that only reputable, well-supported brands represent China on the world stage. Zhu Huarong, chairman of state-owned automaker Changan, has been a vocal proponent of stricter controls, warning at a June 2025 auto conference that the unchecked export of "used" cars could "enormously damage Chinese brands" in overseas markets.
These changes come at a time when China’s EV makers are under scrutiny from all sides. Internationally, the imposition of tariffs by the U.S. and EU has raised the stakes, with Western officials pointing to state subsidies as a source of unfair competition. Domestically, the government is trying to rein in the excesses of a market that, for all its dynamism, risks overheating. The new export regime is one of several recent measures aimed at stabilizing the sector and protecting its long-term viability.
From a broader perspective, the move also signals China’s desire to project a more disciplined, quality-focused image as it cements its leadership in the global EV market. By aligning EV export rules with those for other vehicle types, officials hope to send a message that China is serious about responsible trade and brand reputation. The Ministry of Commerce’s statement that the permits are designed to "promote the healthy development of the EV industry" underscores this ambition.
For automakers, the new rules mean more paperwork and, potentially, higher barriers to entry for smaller or less established players. But for the big names—BYD, Changan, Great Wall Motors, and others—the change could offer a reprieve from the relentless price wars and chaotic competition that have defined the sector in recent years. By tightening oversight and raising the bar for exports, Beijing is betting that quality, not just quantity, will secure China’s place at the top of the global EV hierarchy.
Of course, not everyone is convinced that export permits alone will solve the industry’s problems. Some observers worry that the new system could create bottlenecks or even stifle innovation if implemented too rigidly. Others argue that deeper reforms are needed to address the root causes of oversupply and unhealthy competition. Still, most agree that some degree of regulation is necessary to protect both consumers and the reputation of Chinese brands abroad.
As the January 1, 2026, deadline approaches, automakers and traders alike are scrambling to adapt. The coming months will be a test of China’s ability to balance domestic growth with international credibility, all while managing the expectations of a global market hungry for affordable, reliable electric vehicles. In the words of Wu Songquan, "Chinese automakers should establish standardized processes and achieve high-quality exports in their independent operations." Whether this new export regime can deliver on that promise remains to be seen—but one thing’s for sure: the world will be watching.
With China’s EV sector at a crossroads, the new export permit system marks a decisive step toward greater oversight, higher standards, and a more sustainable future for one of the world’s most dynamic industries.
