By Clarence Leong

The U.S. megabill that President Trump signed into law on July Fourth favors obsolete gasoline-powered cars and hands Chinese electric-vehicle companies a win globally, said the head of a Chinese auto industry group.

"Chinese homegrown brands' exports will see significant growth in the next few years, and the U.S. bill should give China greater room to develop in overseas markets," said Cui Dongshu, the secretary-general of the China Passenger Car Association, on Tuesday.

He said the country's companies would offer "intelligent EV models against the obsolete technology of internal-combustion-engine vehicles."

The U.S. law will end subsidies for electric vehicles purchased after September. Trump said on social media that thanks to the law, "people are now allowed to buy whatever they want -- Gasoline Powered, Hybrids (which are doing very well), or New Technologies as they come about." He has also said that his policies are rescuing the U.S. auto industry from destruction.

According to the Chinese car association, exports of new-energy vehicles from China -- a category that includes pure EVs and plug-in hybrids -- jumped 48% in the first half of this year compared with the same period last year, reaching just shy of one million units. In June alone, exports of these vehicles more than doubled to 198,000.

Leading Chinese EV makers such as BYD are making a big push abroad because of fierce competition in their home market. BYD operates its own fleet of vessels to ship to overseas markets.

Meanwhile in China, local brands, which are pushing out new models and features quickly, had a 64% share of the market in the first half, 7.5 percentage points higher from the year-earlier period, according to the association.

Elon Musk's Tesla, which has a large manufacturing base in Shanghai, is facing those dynamics, as well as specific challenges, in the world's biggest auto market by unit sales. Tesla's first-half sales in China fell 5.4% from a year earlier.

Overall, China's passenger-car market grew 18% last month, which Cui attributed to a government policy encouraging trade-ins. The measure is aimed at boosting consumer spending, but Cui said competition continued to erode profit margins and challenge car companies.

"Competition in the industry will lead to life-or-death situations," he said.

Write to Clarence Leong at clarence.leong@wsj.com

(END) Dow Jones Newswires

July 08, 2025 08:01 ET (12:01 GMT)

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