China will likely be the world’s largest auto exporter in 2023, but it’s a title that comes with dubious glory. For decades, European, American and Japanese cars have dominated world auto exports, but massive auto overcapacity in China has made it critical that the nation export as many of its cars as possible.
Behind the Chinese auto industry’s explosive growth are deep government subsidies, but its domestic demand is stalling as the Chinese economy declines. And so, China is shipping huge quantities of its mostly gas-powered cheap cars throughout the world. It’s the same formula for disaster that we’re seeing play out with EV batteries.