China's electric car dominance laid bare: Chinese car makers BYD, Tesla, Xpeng and others sell more than one million EVs in a month

Sales of Chinese electric cars are booming despite heavy tariffs effectively locking them out of the US, Canada and the European Union.

It was a bumper month for several Chinese EV brands including BYD, Li Auto, Nio and XPeng, as China became the first country to sell one million EVs in a single month.

According to EuroNews, BYD, China’s largest EV-maker and the second-largest in the world, delivered a record 373,083 vehicles to customers in China and abroad last month, up 30 per cent on August last year.

To put that figure into perspective, Australia's top-selling car brand, Toyota, sold 215,240 vehicles in Australia last year.

BYD also reported 270,000 exports in the first seven months of the year, putting the company on track to hit its target of 500,000 overseas sales for 2024 as it sees strong sales growth in Asia, South America and Australia.

Li Auto, who do not currently sell cars in Australia, recorded the best month out of all Chinese EV brands, with sales up 37.8 per cent year on year to 48,122 EVs in August.

Xpeng, who are set to arrive in Australia later this year, delivered 14,036 EVs, with sales up 2.5 per cent on the previous year and 26 per cent from the previous month.

Tesla also marked a strong August in China, selling 63,456 vehicles, its best result for 2024 so far.

The results were partly off the back of government subsidies incentivising owners of internal combustion vehicles to trade in their vehicles for a hybrid or EV model.

It is the second consecutive month in China where new energy vehicle (NEV) uptake has outmatched sales of internal combustion vehicles, providing the biggest indication yet that Western tariffs might not be so damaging for Chinese car brands.

Both the US and Canada have imposed 100 per cent tariffs on Chinese-made EVs, eroding any chance of Chinese brands cracking into the North American market.

The European Union implemented a wide-range of tariffs on Chinese-made EVs and EV brands, though it has softened some deemed as "cooperating companies" in its investigations into state orchestrated support for Chinese automakers.

Teslas made in China will see a tariff of nine per cent in Europe, down from a proposed 20.8 per cent, which is significantly lower than the rates of between 17 per cent and 36.3 per cent imposed on other Chinese brands.

Tesla also currently produces Europe's best-selling EV, the Model Y, from its gigafactory in Berlin, while the Model 3 is sourced from China.

The EU revised tariffs on other Chinese EV makers, setting them at 36.3% for SAIC, 19.3% for Geely and 17% for BYD, all of which were reduced slightly from initial figures.

BYD was also deemed to have complied with the EU’s investigations and was judged to receive less aid from the Chinese government than other Chinese automakers, explaining why its tariff is comparatively low.

In total, Chinese-made EV sales fell 9.7 per cent across Europe, year on year, a better result than June which saw Chinese-made EV sales drop 30 per cent year on year.

In response to the tariffs, Chinese car makers are exploring new manufacturing facilities in Europe, Asia and South America to curb tariffs, with EuroNews reporting on proposed plants in Hungary, Turkey and Brazil.

BYD already manufactures electric buses in Hungary, while SAIC motor operates three car factories in India, Indonesia and Thailand.

Chery Auto also signed an agreement with Spain’s EV Motors to build its first European factory in Catalonia, while the brand has also indicated it would establish factories in Argentina and potentially the UK, as per EuroNews.

China won’t have to fret about tariffs in Australia though, where a lack of domestic manufacturing ensures Chinese brands continue to sell strongly, despite a 5.1 per cent dip in year on year sales on Chinese-made vehicles.

China’s leading vehicle supplier in Australia, MG, has marked 32,255 sales so far this year, down 13.8 per cent from last year, while China’s leading EV-maker BYD has also delivered strongly in 2024 for what is still a new brand, selling 6672 vehicles so far.

The Chinese-made Tesla Model 3, remains Australia’s most popular EV, selling 10,600 vehicles so far, despite a 19.5 per cent decrease in sales for 2024.