The prospects for continued growth in China's new energy vehicle (NEV) exports in 2025 are mixed, with rising costs driven by geopolitical curbs likely to limit the adoption of Chinese vehicles in overseas markets.

China's total exports of NEVs — which include battery-electric, plug-in hybrid and fuel cell vehicles — increased to 1.284mn units in 2024, up by 6.7pc from a year earlier, according to data from Chinese car manufacturers' association CAAM. Several industry experts, including former Chinese commerce minister Wei Jianguo, predict China's NEV exports may rise by 10pc to around 1.4mn in 2025.

NEVs made by China have gained higher adoption in overseas markets in recent years, especially in southeast Asia, Europe and South America. Continued innovations and investment in some key technologies — such as batteries, autonomous driving and intelligent cockpits — have made Chinese NEVs more competitive in international markets.

China's largest NEV producer, BYD, has developed a so-called blade battery, with 180 Wh/kg of energy density. And the country's biggest power battery manufacturer, CATL, has developed its Qilin battery, which has 255 Wh/kg of energy density and can support a driving range of 1,000km.

The intelligence of China's NEVs is world leading. Chinese technology firm Huawei has developed an advanced driving system that includes high-precision maps, sensor fusion and high computing power, and has established partnerships with a number of domestic electric vehicle (EV) makers, such as Seres, Arcfox and Avatr.

The top five importers of Chinese NEVs in the first 11 months of 2024 were Belgium with 242,300 units, Brazil with 149,923, the UK with 112,011, Thailand with 105,900 and the Philippines with 105,700, according to data from Chinese passenger car association CPCA.

Challenges to growth

But China's NEV exports are under pressure from trade protectionist measures imposed by some western governments, including the EU's countervailing duties and the US and Canada's 100pc tariffs.

There has been no further information since China's commerce ministry said in November that its negotiations on a price commitment mechanism for battery EVs (BEVs) between China and the EU "were making progress".

"EU member states are divided over their policies on Chinese EVs, so the negotiations may take a longer time," an industry analyst said. "It would also depend on how EU-US trade relations develop after [US president-elect] Donald Trump takes office."

With increasing pressure from EU duties, China's BEV exports are likely to remain stable this year compared with 2024, according to CPCA secretary-general Cui Dongshu. The EU accounted for around 28pc of China's NEV exports before it imposed countervailing duties in September, industry data show.

And Chinese EV producers are facing high manufacturing costs because they are obliged to invest heavily in technology innovations, given that the EV sector is an emerging market compared with conventional fuel vehicles. Keen competition, continuous price wars and a gradual easing of high central government subsidies are already squeezing producers' profit margins, and overseas tariffs are making the situations worse.

Chinese EV start-up Xiaomi launched its first EV model — the Xiaomi SU7 — in March and sold 130,000 vehicles in 2024. It has invested nearly 30bn yuan ($4bn) in research and development and made a loss of around Yn60,000 on each SU7 it sold in the second quarter.