China’s Auto Market Shakes Off Tariff Impact as Domestic Growth Continues and Intelligent-Driving Systems Proliferate, Says AlixPartners Report

NEW YORK, LONDON and SHANGHAI (April 22, 2025) – China continues to flex its muscles in the global automotive-export market, with Russia continuing to be a stabilizing source of demand for China in the midst of the global tariff storm gripping the industry. That’s one of the findings in a report – which includes a survey of hundreds of automotive executives around the world – released today by AlixPartners, the global consulting firm.

The AlixPartners report notes that China’s exports soared 23%, to 6.4 million passenger vehicles, in 2024, more than 50% above second-ranked Japan, though the report expects growth to moderate to 4% in 2025 as tariffs ripple through the market.

Russia and the Middle East remain the key destinations for China-origin exports and together accounted for 35% of exports in 2024, according to the report, surpassing the combined shipments to Europe and North America for the first time.

“China’s car sales to Russia and Belarus have more than doubled over the past five years, insulating it in part from the volatility of tariffs,” said Andrew Bergbaum, Global Leader of the Automotive and Industrial Practice at AlixPartners.  

The AlixPartners report forecasts Chinese brands will account for 30% of the global market by 2030, compared with 21% last year.

While countries continue to impose tariffs on China-brand vehicles, the impact remains muted. According to the AlixPartners report, although recent tariffs from the U.S. and other countries will increase the cost of China’s vehicle and auto components exports by about 24%, or $46 billion, this represents only about 3.8% of China’s total auto-industry production value.

Growing export sales have been accompanied by continuing growth in the domestic China market, which the report forecasts will grow by 4%, to 26.8 million vehicles, in 2025, in sharp contrast to declines in other major markets.

Domestic growth in China is being driven by rapid adoption of electric vehicles, increasingly with intelligent-vehicle features such as autonomous-driving systems, says the report. Electric-vehicle sales are forecast to account for 54% of the domestic market in 2025, says the report, released on the eve of the big auto show in Shanghai.

The domestic boom in China’s electric- and intelligent-vehicle sales has changed the trajectory of the price war that started in 2023, with financial incentives and new features increasingly replacing discounts on retail prices, says the report. 

“Complimentary intelligent-driving features are emerging as a key competitive tool, further distinguishing China-brand offerings from overseas offerings,” said Yvette Zhang, a Partner in the Automotive and Industrial Practice at AlixPartners.

ADAS L2 and above features were included on almost 60% of passenger-vehicle sales in China last year, compared with fewer than 40% in the U.S., according to the report. And penetration of these types of features is set to increase ahead of other regions, according to the report’s survey of automotive executives—which included 100 executives in the U.S., 100 in China and 200 in Europe and the United Kingdom.

Crucially, two-thirds of the executives surveyed identified China as leading in intelligent-driving systems—systems that would be difficult to replicate in other markets, according to the report. These include the collection and processing of data, and the availability of software and machine-learning talent.

“Chinese brands are leveraging unique advantages to pursue faster and cheaper intelligent-driving solutions that are ‘good enough’ to bring to market, and select global automakers are seeking to learn from them through new strategic partnerships,” said Stephen Dyer, Asia Leader of the Automotive and Industrial Practice at AlixPartners.

About AlixPartners
AlixPartners is a results-driven, global consulting firm that specializes in helping businesses successfully address their most complex and critical challenges. Our clients include companies, corporate boards, law firms, investment banks, private equity firms, and others. Founded in 1981, AlixPartners is headquartered in New York, and has offices in more than 20 cities around the world. For more information, visit www.alixpartners.com.

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