Chinese EVs Blow Past Tesla and Tariffs En Route to Global Reign
Wall Street Journal
Jan-21-2026
Julian Scot-Smith was window shopping at a Porsche dealership with his wife in London’s fancy Mayfair district before Christmas, sizing up the SUVs.
Then the couple peeked into another dealership around the corner.
“We were thinking of treating ourselves to one of the German brands, but these Chinese cars look fantastic,” said Scot-Smith, eyeing the $60,000 BYD Sealion 7.
Not long ago, few would buy the idea that a Chinese electric-vehicle maker such as BYD could sweep European buyers off their feet, competing against Volkswagen, Toyota and even such luxury brands as BMW and Porsche.
Yet BYD is leading a pack of Chinese automakers whose global export onslaught has surpassed even bullish expectations. The Shenzhen-based automaker delivered more than a million vehicles outside China in 2025, the company said, more than double the previous year’s total.
China surpassed Japan in 2023 as the world’s No. 1 auto exporter. Last year, it shipped 7.1 million vehicles from its pool of domestic automakers, according to the China Association of Automobile Manufacturers, up from 5.9 million the previous year. BYD, which replaced Tesla as the world’s biggest EV seller, is one of Beijing’s national champions.
“BYD wants to become one of the most relevant players in Europe, and in a very short period,” said Alfredo Altavilla, a veteran industry executive advising the company.
Chinese brands hold a roughly 7% share of Western Europe’s total auto market, selling more than 500,000 units in the first three quarters of 2025, according to data provider Schmidt Automotive Research.
European market leader Volkswagen, which owns Porsche and Audi, has already had its lunch eaten by local brands in China, which was once estimated to account for more than half of the German company’s global profit. Now, China is coming for VW on its home turf.
In a statement, VW said it had “confidence in our products and our ability to innovate.”
Politics, not market forces, has been the biggest obstacle to China’s automakers.
In the U.S., tariffs and restrictions on Chinese software have effectively barred EV imports from China, reflecting fears about jobs and national security. Yet Chinese vehicles could be on the way. Geely, China’s second-largest automaker after BYD, hinted this month it might expand production of its Chinese brands to the U.S., possibly at the South Carolina factory of its subsidiary Volvo Cars.
“The big question for us is where and when,” said Ash Sutcliffe, Geely’s global communications chief.
In a speech last week at the Detroit Economic Club in Michigan, President Trump said Chinese automakers were welcome as long as they used U.S. factories and workers. “Let China come in,” he said.
Canada said Friday it would cut tariffs on Chinese EVs, following a meeting between Canadian Prime Minister Mark Carney and Chinese leader Xi Jinping: 49,000 vehicles will qualify for Canada’s most-favored-nation rate of 6.1%. The agreement was cast as part of a new strategic partnership that also foresees Chinese investment in Canadian auto production.
Trump’s second-term tariff policy and his threats of territorial expansion have prompted Canada to take a more balanced stance in the U.S.-China rivalry. Canada’s current tariff is 100%, in line with U.S. policy.
Mexico has gone in the other direction, increasing tariffs to 50% this year on vehicles made in China and other countries that don’t share mutual free-trade agreements. Only firms operating car plants in Mexico, which include U.S. companies, can import their made-in-China models tariff-free. To cushion price increases, Chinese automakers boosted exports to Mexico late last year, stocking up ahead of the tariff hike, industry executives said.
Chinese vehicles also face steep tariffs in the European Union, including 27% on BYD EVs.
Yet, Beijing can’t afford to let up.
China has factories capable of manufacturing more than 46 million vehicles a year, but annual sales are likely to fall short of 30 million in coming years, according to S&P Global.
Exports have the potential to close the gap for companies that can afford it.
“You need to go global. Toyota did it. Ford did it. GM did it,” said Klaus Zyciora, a former Volkswagen designer who is head of design at state-owned automaker Changan. “If you are not a manufacturer that is able to bring five million units annually to the market, you will have a hard time.”
Jan-21-2026
Julian Scot-Smith was window shopping at a Porsche dealership with his wife in London’s fancy Mayfair district before Christmas, sizing up the SUVs.
Then the couple peeked into another dealership around the corner.
“We were thinking of treating ourselves to one of the German brands, but these Chinese cars look fantastic,” said Scot-Smith, eyeing the $60,000 BYD Sealion 7.
Not long ago, few would buy the idea that a Chinese electric-vehicle maker such as BYD could sweep European buyers off their feet, competing against Volkswagen, Toyota and even such luxury brands as BMW and Porsche.
Yet BYD is leading a pack of Chinese automakers whose global export onslaught has surpassed even bullish expectations. The Shenzhen-based automaker delivered more than a million vehicles outside China in 2025, the company said, more than double the previous year’s total.
China surpassed Japan in 2023 as the world’s No. 1 auto exporter. Last year, it shipped 7.1 million vehicles from its pool of domestic automakers, according to the China Association of Automobile Manufacturers, up from 5.9 million the previous year. BYD, which replaced Tesla as the world’s biggest EV seller, is one of Beijing’s national champions.
“BYD wants to become one of the most relevant players in Europe, and in a very short period,” said Alfredo Altavilla, a veteran industry executive advising the company.
Chinese brands hold a roughly 7% share of Western Europe’s total auto market, selling more than 500,000 units in the first three quarters of 2025, according to data provider Schmidt Automotive Research.
European market leader Volkswagen, which owns Porsche and Audi, has already had its lunch eaten by local brands in China, which was once estimated to account for more than half of the German company’s global profit. Now, China is coming for VW on its home turf.
In a statement, VW said it had “confidence in our products and our ability to innovate.”
Politics, not market forces, has been the biggest obstacle to China’s automakers.
In the U.S., tariffs and restrictions on Chinese software have effectively barred EV imports from China, reflecting fears about jobs and national security. Yet Chinese vehicles could be on the way. Geely, China’s second-largest automaker after BYD, hinted this month it might expand production of its Chinese brands to the U.S., possibly at the South Carolina factory of its subsidiary Volvo Cars.
“The big question for us is where and when,” said Ash Sutcliffe, Geely’s global communications chief.
In a speech last week at the Detroit Economic Club in Michigan, President Trump said Chinese automakers were welcome as long as they used U.S. factories and workers. “Let China come in,” he said.
Canada said Friday it would cut tariffs on Chinese EVs, following a meeting between Canadian Prime Minister Mark Carney and Chinese leader Xi Jinping: 49,000 vehicles will qualify for Canada’s most-favored-nation rate of 6.1%. The agreement was cast as part of a new strategic partnership that also foresees Chinese investment in Canadian auto production.
Trump’s second-term tariff policy and his threats of territorial expansion have prompted Canada to take a more balanced stance in the U.S.-China rivalry. Canada’s current tariff is 100%, in line with U.S. policy.
Mexico has gone in the other direction, increasing tariffs to 50% this year on vehicles made in China and other countries that don’t share mutual free-trade agreements. Only firms operating car plants in Mexico, which include U.S. companies, can import their made-in-China models tariff-free. To cushion price increases, Chinese automakers boosted exports to Mexico late last year, stocking up ahead of the tariff hike, industry executives said.
Chinese vehicles also face steep tariffs in the European Union, including 27% on BYD EVs.
Yet, Beijing can’t afford to let up.
China has factories capable of manufacturing more than 46 million vehicles a year, but annual sales are likely to fall short of 30 million in coming years, according to S&P Global.
Exports have the potential to close the gap for companies that can afford it.
“You need to go global. Toyota did it. Ford did it. GM did it,” said Klaus Zyciora, a former Volkswagen designer who is head of design at state-owned automaker Changan. “If you are not a manufacturer that is able to bring five million units annually to the market, you will have a hard time.”
