China took the largest car exporter position in the world after it surpassed Japan during the first quarter of 2023. This increase is due to its rising electric vehicle sales and the opportunity to keep doing business with Russia. According to official numbers that were released a week ago, China shipped more than 1 million automobiles in the first three months of this year, showing an increase of 58%, which is in contrast to what was shipped during the same period of last year. Japan shipped 950,000 automobiles in 2022.
Even though Japan lost the number one position to China, the number of automobiles exported by Japan during the first quarter of 2023 was a 6% increase from the year before.
The capacity of Chinese auto manufacturers to continue selling their vehicles in Russia was a significant contributor to the country’s rising numbers. Following the beginning of the war in Ukraine, automakers in Japan joined their competitors from other western nations in exiting the market. But automakers in China didn’t, and this caused sales to triple to 140,000 units at the beginning of 2023.
Chinese rules and regulations have motivated the country’s automakers to make huge investments in electric vehicles, while automakers in Japan have taken it slowly in investing in EV technology. As a result, Japan’s hold on markets in southeast Asia might be weakening.
Car sales in southeast Asia has historically been dominated by Japanese manufacturers, but Chinese electric vehicles could be assisting the country’s dominance. Thailand was China’s third-largest export market, with Belgium and Australia being its first two primary export destinations.
The automotive sector in China has been helped by the shift to renewable sources of energy, leaving behind nonrenewable sources. However, it is not solely domestic-owned auto producers that are driving China’s increasing export numbers. Tesla, an electric vehicle manufacturer owned by Elon Musk, has a sizable factory in Shanghai, China, that supplies Japan as well as countries in Europe. An estimated 1,250,000 vehicles can presently be produced annually in Tesla’s Shanghai Gigafactory, and Tesla intends to expand capacity. In fact, a month ago, the factory began producing the model Y sports utility cars, which are to be exported to Canada.
In comparison to the previous year, exports of new energy vehicles, including electric vehicles, shot up during the first quarter by more than 90%. Among China’s leading exporters of NEVs are Tesla’s Chinese subsidiary, SAIC, which owns the MG and BYD brands and has the support of Warren Buffet, a renowned American investor.
The growing numbers of EV exports from China show that different startups that are based in different parts of the world, such as Fisker Inc. (NYSE: FSR), have a chance to stake their claim on the expanding market for electric vehicles as the world moves away from fossil fuel-based automobiles.
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