China’s car sales fell 21.6% in April, a seventh straight monthly decline, as high oil prices hurt domestic demand while EV and hybrid exports surged 111.8% on Iran war fuel costs.

Summary:

• China’s passenger car sales dropped 21.6% year-on-year to 1.4 million vehicles in April, a seventh consecutive monthly decline, according to the China Passenger Car Association
• High oil prices weighed on combustion engine sales while plug-in hybrid demand was also sluggish; electrified vehicles accounted for 60.6% of total sales but slid 6.8%, a fourth straight monthly fall
• EV and plug-in hybrid exports jumped 111.8% year-on-year, outpacing an 80.2% rise in overall car exports, as Iran war fuel costs boosted overseas EV appetite
• BYD, the world’s largest EV maker, extended its global sales downturn to eight months despite continued export strength

China’s passenger car market extended its losing streak to seven consecutive months in April, with domestic sales falling sharply as high fuel prices and sluggish consumer confidence weighed on demand, while the country’s automakers found a growing outlet overseas, particularly for electric and plug-in hybrid vehicles whose export volumes more than doubled on the back of Iran war-driven fuel cost pressures globally.

Total passenger car sales dropped 21.6% from a year earlier to 1.4 million vehicles in April, according to China Passenger Car Association data released on Monday. The CPCA’s secretary-general attributed the weakness in combustion engine sales directly to elevated oil prices, while plug-in hybrid demand was also softer than anticipated. Even the electrified segment, which now accounts for 60.6% of total domestic sales, was not immune, with combined electric vehicle and plug-in hybrid sales declining 6.8% on the year, extending their own losing streak to four months.

The export picture could hardly be more different. Overseas shipments of EVs and plug-in hybrids surged 111.8% year-on-year in April, outpacing an already robust 80.2% rise in total car exports. The driver is straightforward: the U.S.-Israeli war on Iran has pushed global fuel prices sharply higher, making the economic case for electric vehicles considerably more compelling for consumers in overseas markets who are feeling the cost of petrol and diesel at the pump. Chinese automakers, facing intense domestic competition and a market that has yet to respond to their push toward higher-end models, have been increasingly targeting those export opportunities to sustain volumes and revenues.

The divergence is perhaps most starkly illustrated by BYD, the world’s largest electric vehicle manufacturer. Despite persistent strength in its overseas shipment figures, the company’s global sales have now declined for eight consecutive months, a reflection of how severely domestic market weakness is dragging on overall performance even for the segment’s dominant player.

The data adds a further dimension to the Iran war’s impact on global energy and transport markets. Beyond the direct disruption to oil supply through the Strait of Hormuz, elevated fuel costs are reshaping consumer behaviour in ways that may prove durable, accelerating EV adoption in markets that had been slower to transition and redirecting Chinese automotive production capacity toward export channels. For oil demand forecasters, a Chinese auto market where combustion engine sales are in persistent structural decline and EV exports are growing at triple-digit rates represents a meaningful long-term variable.