China is tightening the reins on electric vehicle (EV) exports, announcing new permit requirements for automakers starting January 1, 2026. According to the Commerce Ministry, this move aims to “promote the healthy development of the new energy vehicle trade.” But what does this mean for the global EV market, especially here in South Africa?
Why the Change?
China's EV sector has seen explosive growth, becoming the world's largest auto market and car exporter. In fact, nearly 40% of the 5.5 million vehicles exported last year were EVs. However, this rapid expansion has also led to concerns about oversupply and a fierce price war among domestic manufacturers. The term “involution” is being used to describe the meaningless competition plaguing the industry.
Global Reactions
The United States and European Union members have already imposed tariffs on Chinese-made EVs, citing unfair advantages due to government subsidies. These new export permit requirements could be seen as a response to these concerns, or perhaps a move to better regulate and control the quality and flow of EVs leaving the country.
Market leader BYD faced criticism earlier in 2025 for initiating price cuts, prompting competitors to follow suit. Great Wall Motors chairman Wei Jianjun warned that the industry's current trajectory could be unsustainable.
Despite these challenges, China's domestic EV sector experienced record sales in the first half of 2025, with EVs accounting for over 50% of total passenger vehicle sales.
What This Means for South Africa
South Africa is increasingly looking towards electric vehicles as a key part of its future transportation strategy. While most EVs currently on our roads are imported, these new regulations in China could impact supply chains and potentially lead to price fluctuations. It remains to be seen how these changes will affect the availability and affordability of Chinese-made EVs in the South African market, and whether this will accelerate local EV production or encourage imports from other countries.
- Increased Scrutiny: Expect stricter checks on the quality and standards of EVs exported from China.
- Potential Price Changes: The cost of compliance with the new permit requirements could be passed on to consumers.
- Supply Chain Adjustments: South African importers may need to diversify their sources of EVs.