China Targets 30-40% EV Share by 2035, Eyes Australian Market

  china-targets-30-40-ev-share-by-2035-eyes-australian-market.html
  Automotive and Transportation on Mon, Dec 08th, 2025 by Sky News Australia
      Locale: AUSTRALIA

China’s 2035 EV Vision and the Australian Market: A Sky News Australia Analysis

Sky News Australia’s feature “China’s dumping ground labour: actively encouraging foreign firms to flood Australian market in pursuit of ambitious 2035 EV targets” (link) examines a rapidly evolving cross‑border dynamic that could reshape the Australian automotive landscape. The article traces how China’s ambitious 2035 electric‑vehicle (EV) targets—rooted in national industrial policy and a broader “green‑new‑deal” vision—are now being leveraged to export cheap, labor‑intensive EVs into Australia, thereby threatening domestic manufacturing and prompting calls for protective measures.

1. China’s 2035 EV Target in Context

China has set a clear policy objective: by 2035, 30‑40 % of all new car sales in the country should be EVs, with the remainder being hydrogen or hybrid vehicles. This target is part of a larger strategy to cement China as a global leader in EV technology, battery production, and supply‑chain integration. The government has backed this push through subsidies, tax incentives, and a robust state‑led financing framework that has nurtured domestic giants such as BYD, NIO, XPeng, and Li Auto. The article cites the “Made in China 2025” policy and the “China EV 2035” framework (see link) as the policy backbone that has spurred this rapid scaling.

2. Exporting Cheap Production to Australia

The crux of the Sky News piece is the revelation that China’s export strategy is deliberately aimed at “dumping” EVs into foreign markets, especially those with liberal trade regimes. By leveraging its low‑cost labour force, China can produce EVs at a fraction of the cost of Western competitors. The article highlights that Chinese firms have already set up regional distribution hubs in Southeast Asia and have begun to test the Australian market. For instance, BYD has reportedly entered the Australian retail space through partnership with local retailers, offering vehicles priced up to 25 % lower than comparable domestic options.

This strategy is not accidental. The Chinese Ministry of Commerce has issued a series of guidelines encouraging “strategic foreign investment” and “export‑oriented” operations. The article references a 2023 Ministry of Commerce directive that encourages EV makers to establish local assembly or distribution centers in target markets, thereby reducing shipping costs and avoiding tariffs (link). In Australia, the same logic applies: by establishing a foothold in the capital city and major metropolitan areas, Chinese firms can tap into the growing demand for affordable, low‑emission vehicles.

3. Impact on the Australian Automotive Ecosystem

Australia’s automotive industry is a delicate ecosystem. While the country once boasted robust domestic production (e.g., Holden, Ford Australia), it now relies heavily on imported vehicles, with a small niche for locally manufactured electric cars. The article notes that the Australian government’s National Electric Vehicle Strategy (link) intends to promote EV adoption through subsidies, charging‑infrastructure expansion, and tax rebates. However, the influx of cheap Chinese EVs threatens to undercut the domestic supply chain and undermine the market potential for Australian‑produced EVs.

Industry analysts quoted in the piece—including a senior analyst from the Australian Chamber of Commerce—warn that the competitive pressure could lead to a “race to the bottom” in pricing, squeezing margins for smaller domestic players and discouraging investment in local manufacturing. The article points out that the Australian automotive manufacturing sector has already been shrinking, with fewer factories and a dwindling workforce, leaving the country vulnerable to price‑driven imports.

4. Trade Policy and Potential Retaliation

Australia’s trade relationship with China is one of its most important, but it has been fraught with friction. The article notes that China has imposed tariffs on Australian wine, barley, and dairy in recent years, while Australia has responded with retaliatory tariffs on Chinese goods. In this context, the influx of Chinese EVs could reignite trade tensions.

The article argues that Australian policymakers must consider a range of options: targeted tariffs on EV imports, stricter licensing for foreign investment in the automotive sector, or incentives to boost domestic EV production. It also highlights that Australia already has a nascent battery‑cell industry—largely centered around the Pilbara lithium‑mining region—and could leverage this resource base to strengthen its position in the EV value chain.

5. Links to Broader Trends

The piece weaves in a number of related stories to give readers a fuller picture:

• China’s State‑Led Subsidies: A linked article explains how Chinese automakers receive generous subsidies that enable them to price aggressively abroad.
• Australian EV Adoption: The government’s EV policy page (link) outlines the subsidies and incentives that are driving Australian consumer demand.
• Industry Outlook: A Bloomberg‑style report (link) projects Australian EV sales growth, but notes the competitive pressure from overseas suppliers.

By following these hyperlinks, the article invites readers to explore how domestic policy, global supply‑chain shifts, and trade dynamics intersect to shape the future of the Australian automotive industry.

6. Key Takeaways

1. China’s 2035 EV Vision is not confined to domestic borders; it includes a systematic export strategy aimed at capturing new markets, including Australia.
2. Cheap labour and aggressive subsidies enable Chinese firms to price EVs far below local competitors, creating a potential “dumping” scenario.
3. Australia’s automotive sector is already in decline; the influx of inexpensive Chinese EVs could accelerate this trend and erode the market share of domestic manufacturers.
4. Policy responses are necessary: tariffs, investment restrictions, or robust incentives for local EV production could help level the playing field.
5. Trade relations between Australia and China will be a key battleground; how Australia chooses to respond to Chinese EV imports will shape its broader trade policy.

In sum, the Sky News Australia feature presents a compelling warning: China’s ambitious 2035 EV targets, backed by state‑led subsidies and low‑cost production, are being deployed globally with the explicit aim of flooding foreign markets—most notably Australia. The country must weigh its policy options carefully, lest it cede ground in a sector that is critical to its economic resilience and environmental commitments.