Surge in Demand for New Car-Carrying Ships Driven by China’s EV Export Boom

BEIJING/SHANGHAI — The Chinese automotive industry is experiencing a surge in demand for car-carrying vessels, driven by the growth in exports of electric vehicles (EVs). Data indicates that Chinese automakers and shippers are currently placing orders for a record number of vessels, positioning China to have the world’s fourth-largest fleet by 2028.

Currently, China boasts the eighth-largest fleet globally with 33 car-carrying ships. In comparison, Japan leads with 283 ships, followed by Norway, South Korea, and Isle of Man. However, Chinese companies have taken the lead in new orders, constituting a quarter of all orders worldwide. Notable buyers include SAIC Motor, Chery Automobile, EV manufacturer BYD, as well as major shippers like COSCO and China Merchants representing Chinese automakers.

With an impressive 47 ships on order, the Chinese controlled car carrier fleet is expected to increase significantly, reaching 8.7%. This growth is largely benefiting Chinese shipyards, which have secured 82% of global orders, showcasing China’s dominance in the industry.

The surge in orders can be attributed to automakers seeking new opportunities in markets where their vehicles can command higher prices. China has emerged as a leader in auto exports, surpassing Japan in the previous year. BYD, for example, exported over 240,000 cars in 2023, constituting 8% of its global sales, with plans to further increase exports to 400,000 this year. Major foreign players like Tesla and Volkswagen have also expanded production in China to capitalize on its cost-effective supply chain.

The rise in shipping costs and government support have prompted automakers to invest in purchasing their own ships. By the end of 2023, the daily rate to charter a 6,500-vehicle carrier had surged to $115,000, indicating the intense competition in the market. However, concerns have been raised by the U.S. and EU regarding China’s export strategy and accusations of flooding markets with low-priced products.

In response, the Chinese government has defended its approach, emphasizing innovation and minimizing the focus on excess capacity. Although concerns about overcapacity persist in shipbuilding, there are still opportunities in specialized segments like car cargo ships, according to experts.

High-level discussions on the matter have taken place, with U.S. Treasury Secretary Janet Yellen addressing overcapacity concerns during a visit to China, while China’s Minister of Commerce Wang Wentao is expected to engage in discussions during a visit to Europe regarding an ongoing probe into Chinese EV subsidies.

The automotive industry in China continues to evolve rapidly, with the export of electric vehicles driving significant growth and shaping the global landscape of car-carrying vessels.