China’s car shipments are projected to cool this year due to geopolitical tensions following two years of rapid growth, while US tariffs will saddle the nation’s auto industry with an additional US$46 billion in export costs, according to management consultancy AlixPartners. Auto exports would climb by about 4 per cent to 6.7 million units in 2025, the firm said in a report on Thursday. Shipments grew 23 per cent last year to 6.4 million units after producers boosted sales to Russia and Belarus by 28 per cent, and to the Middle East by 61 per cent, to mitigate export curbs in North America and Europe, it said. “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. “Many countries have increased tariffs on Chinese automobiles since 2024, with the US representing the highest tariff of [up to] 245 per cent,” AlixPartners said. Chinese EV makers also face a 100 per cent tariff in Canada, 35 per cent in Brazil and 17.8 per cent to 45.3 per cent in Europe. Tariffs would increase the cost of China’s automotive exports to the US by US$46 billion, the report said, with car producers taking a US$7.2 billion hit on shipments, and auto-parts suppliers shouldering US$38.8 billion. “We believe only free trade can effectively propel growth in the global automotive industry,” Qin Lihong, president of Shanghai-based carmaker Nio, said on the sidelines of the Shanghai Auto Show. “We are now designing and building our cars for the European market, hoping to make them competitive, even with the existing tariff rates.” While the trade war would restrain exports to North America, Chinese EV makers were projected to keep making inroads elsewhere to expand their global market share to about 30 per cent by 2030 from 21 per cent last year, AlixPartners said. They are projected to score big gains in Southeast Asia, the Middle East, South America and Russia. China’s dominance in its domestic market remains unchallenged, with local brands projected to win 76 per cent of the market by 2030 from 67 per cent this year, the report showed. The share of foreign brands could shrink to 24 per cent from 33 per cent over the same period. The firm forecast that domestic sales would reach 29.8 million units in 2030 from 26.8 million units in 2025 and 25.8 million last year. Sales of new-energy vehicles would make up 77 per cent of sales in 2030 versus about 54 per cent in 2025, the report showed. The Shanghai Auto Show 2025 under way now has highlighted the intense competition within the Chinese EV sector, with international brands such as Tesla, Kia, Chevrolet, Rolls-Royce, and Jaguar Land Rover missing from China’s largest car show. “With historically low capacity utilisation, pressure remains on underperforming automakers, especially foreign brands” that lack scale in sales, AlixPartners said.