How Chinese car traders sell EVs abroad

The staff at Chinese electric vehicle company Li Auto noticed something unusual when they counted the number of cars sold in July 2023. In the first three weeks of the month, according to CEO Li Xiang, 200 cars were registered in China, but never insured — and therefore unable to be driven in the country.

After looking into it, the company realized that traders had been shipping the cars abroad, mostly to Central Asia and the Middle East, Li said on his Weibo account. He posted a picture showing a Li Auto L7 SUV priced at 31.8 million Kazakhstani tenge ($70,897), about $25,800 higher than its starting price in China. 

China makes more electric vehicles than any other country, with BYD recently toppling Tesla as the world’s leading EV maker. It has dozens of local manufacturers, including Nio, Xpeng, and even smartphone maker Xiaomi. Chinese EV companies have also found a foothold in other countries, such as Indonesia and Jordan.

Individual traders are now capitalizing on the EV boom by exporting trendy models, often to countries where Chinese EVs don’t have an official sales presence. They have been taking advantage of a policy that allows used cars to be sold abroad without the authorization of carmakers: Traders register new cars in China before immediately shipping them overseas. This means the cars are technically secondhand — and therefore fair game for export — and yet effectively brand-new at the same time.

Six car exporters told Rest of World they have shipped “secondhand” EV marques to countries including Russia, Kazakhstan, and Saudi Arabia, where luxury electric cars from China are trendy status symbols. On the China-Kazakhstan border in Xinjiang, exporters even work with engineers to change the EVs’ software language to English or Russian. In 2023, China exported over 100,000 cars, most of which were electric cars or plug-in hybrids, estimated a Huatai Securities research report.   

“Chinese cars are getting really popular,” Ethan Zhang, a car exporter based in China’s northern province of Hebei, told Rest of World. Over the past two years, Zhang’s company has exported more than 2,000 vehicles, 80% of which were electric or plug-in hybrids. “Big screens, interactive features, hidden door handles, voice control, massage chairs — all these things can be very attractive,” he said. 

In the past, these so-called parallel traders worked in the opposite direction, supplying Chinese buyers with luxury BMW and Mercedes-Benz marques to lower prices. They’ve now turned to exports as interest in Chinese EVs picks up globally, allowing adventurous drivers to get their hands on the Li Auto, Zeekr, and BYD models that are yet to become officially available in their countries. While carmakers need to establish sales and service networks before venturing into a new market, parallel traders are able to meet niche demands in places with low EV adoption. “When [car companies] enter a new market, they have a lot of things to consider,” Zhang said. “But traders like us are more nimble.” 

Russia is a major destination for these unauthorized exports, Chinese traders told Rest of World. Konstantin Durasov, a car dealer in Moscow, said he shifted from selling Western cars to Chinese EVs a year ago, as sanctions imposed on Russia following the war in Ukraine made it difficult for other foreign cars to enter the country. His dealership, Zeecar, imported around 400 electric cars and plug-in hybrids from China in 2023, including premium SUVs from BYD, Li Auto, and Zeekr. The company also has an office and staff in Shanghai to facilitate the trade. 

“When [car companies] enter a new market, they have a lot of things to consider, but traders like us are more nimble.” 

“Some time ago, Chinese cars were considered very, very cheap and not really good,” Durasov said. “But now [buyers] think it is a very good value for the money that you pay for the car.” 

Katerina Zabrodkina, a Bishkek-based consultant specializing in the Russia auto market, told Rest of World the departure of most foreign car brands has pushed curious, affluent consumers toward the more easily accessible Chinese marques. “More and more people are discovering new brands, including Chinese ones, whose design has changed for the better in recent years,” Zabrodkina said. “We have already seen Tesla, but Zeekr is something new and therefore attractive.” 

Some traders advertise their EV businesses by posting glamorous car videos on TikTok and Instagram. Hu Changwen, an exporter based in Urumqi in China’s Xinjiang region, told Rest of World he had received messages from interested customers in South Africa, Mexico, and Algeria through his TikTok account. A clip demonstrating the Huawei-backed Aito M5, which is only available in China, has garnered more than 6 million views. Hu said several German dealers had inquired about buying the Huawei car, but the European Union’s car import regulations block such parallel trading. 

As more Chinese dealers join the trade, they also face increasing competition and shrinking profits. Yang Pingping, a Russian-speaking trader in the northeastern province of Heilongjiang, told Rest of World margins dropped from 15% in early 2023 to about 8% this year. Zhang said the profit for each vehicle fell from a peak of 50,000 yuan ($7,018) in 2022 to about 10,000 yuan ($1,404) recently. 

Without the manufacturers’ presence in the country, the cars come with no official after-sales services, making repairs potentially challenging. Li Auto, for instance, does not sell car parts to exporters, so Russian buyers have to order spare parts taken from used cars, according to Durasov, the dealer in Moscow. Huang said some Chinese exporters were expanding into the repair business. 

In his Weibo post, Li Auto’s CEO wrote that the company had no plans to launch products abroad before 2025, but that it had no way to stop unauthorized exports. Some traders told Rest of World they were doing the rising EV brands a favor by testing the waters in new markets. Li Auto did not respond to a request for comment. 

A few months after working on Chinese cars, Durasov bought a Li Auto L7 himself, and a Li Auto L9 for his brother. His business partner purchased a Zeekr. Durasov is also part of a Telegram group for Li Auto enthusiasts, where more than 17,000 car owners and interested buyers from Russia, Kazakhstan, and other Russian-speaking countries exchange tips on maintenance and operating the systems. On the street, curious passersby sometimes ask Durasov about his car. “It works like an advertisement for us,” he said. “When you drive this car, you are selling these cars.”