China Implements Export Permit System for Electric Vehicles

China’s Ministry of Commerce has announced that from 1 January 2026, electric vehicle (EV) manufacturers will be required to secure export permits before shipping their cars overseas. The policy marks a decisive shift in Beijing’s oversight of its fast-growing EV industry, intended to encourage the “healthy and sustainable” development of the sector while aligning EV exports with existing rules for cars and motorbikes.

A New Regulatory Framework

Although the ministry has yet to release full details, industry analysts expect the permit process to include requirements related to production capacity, quality standards, supply chain verification, and export volume limits. By introducing this system, the government aims to exert greater control over the pace and structure of EV exports, ensuring quality assurance and protecting the reputation of Chinese brands abroad.

The move comes against the backdrop of an intensely competitive domestic market, where price wars and aggressive discounting have raised concerns about long-term sustainability. Regulators have already directed automakers to curb discounting practices and settle outstanding debts with suppliers.

Impact on the Global Market

China has established itself as the world’s largest producer and exporter of electric vehicles, with companies such as BYD, NIO, and SAIC Motor expanding into Europe, Southeast Asia, and beyond. In the first seven months of 2025, EV exports reached roughly $19 billion, maintaining strong momentum despite rising trade frictions, particularly with the European Union, which has imposed tariffs to curb Chinese imports. Europe remains the primary destination for these exports.

The introduction of the export permit system is expected to give Beijing more strategic control over which companies are able to access foreign markets. Analysts suggest it could be part of a broader trade policy, balancing China’s global ambitions with the need to manage external political and economic pressures.

Industry Response and International Automakers

Domestic automakers have not yet issued formal statements, but both Chinese brands and international companies producing in China will be affected. Global manufacturers such as Tesla, Volkswagen, and BMW, which rely on China’s low-cost production base and advanced EV supply chains, will need to comply with the new system.

BMW, which produces electric Mini models through its joint venture with Great Wall Motor, has indicated that it already secures export licences as a foreign producer and does not expect major disruption. Tesla’s Shanghai facility, manufacturing the Model 3 and Model Y for both local and overseas markets, has seen reduced exports through much of 2025. Volkswagen, meanwhile, is expanding its China-based exports to include new destinations across Asia, South America, and the Middle East, alongside existing shipments of its Cupra Tavascan SUV to Europe.

Industry experts note that established automakers with strong government ties are likely to adapt quickly to the new administrative requirements. However, the changes may add complexity for smaller or newer entrants into the market.

Strategic Outlook

With the global EV market forecast to represent over 30% of all new car sales by 2030, China’s decision to tighten control over exports could have far-reaching implications for international trade and competition. According to Cui Dongshu, secretary general of the China Passenger Car Association, the Chinese automotive industry aims to surpass 40 million annual vehicle sales within five years.

By implementing export permits, Beijing is signalling its intent to not only regulate growth more strategically but also strengthen its long-term position in a rapidly evolving global market.

Written By: 

Cole Jackson

Lead Associate at the BRICS+ Consulting Group 

Chinese and South American Specialist

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