The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Katrina Hamlin

HONG KONG, Aug 29 (Reuters Breakingviews) - China's exports engine is humming along. The $136 billion electric-car maker BYD 002594.SZ, 1211.HK is a case in point. It is on track to more than double the number of cars sold overseas this year, far outpacing growth at home.

The Shenzhen-based marque sold roughly 464,000 vehicles outside China in the six months to June, more than double the same period last year. This puts it well on track to hit an annual goal of 1 million cars sold abroad. That target, which it shared with investors in June according to China Merchants Securities, envisages overseas sales accounting for about a fifth of the annual total. Despite an intense price war at home, where BYD saw its market share shrink this year, analysts expect a 55% bump in first-half net profit when the group reports interim earnings on Friday.

BYD's inroads into Europe, Latin America and other markets stand out amid Washington's tariff salvos. In fact, it is not alone: total exports from the People's Republic rose 7.2% in July from a year earlier, the 16th consecutive month of growth. Motor vehicles, integrated circuits, ships and LCD panels were among the goods that notched up double-digit volume gains in the first seven months of 2025, customs data shows. True, some trade came from importers hurrying to get ahead of looming tariffs. But there are other forces too.

During the first half of the year, the DXY U.S. Dollar Currency Index .DXY has dropped by 11%. That has, in turn, resulted in a weaker yuan in trade-weighted terms, benefiting exporters. On average, the cost of a vehicle exported from China to Europe fell to 15,800 euros in June, compared with 18,800 euros in 2024, researchers at Gavekal estimate.

Another factor is more competitive products. BYD's cars, for example, consistently boast more sophisticated features, larger specs and longer battery range compared with foreign rivals' similarly priced options, per HSBC analysts. Similarly, smartphones from Xiaomi 1810.HK and laptops from Lenovo 0992.HK have gained traction overseas.

Protectionism is rising, however. Mexico – the world's largest importer of Chinese cars this year – is planning duties on Chinese goods, Bloomberg reported on Thursday, citing sources. This will come after Russia – last year's top destination for Made-in-China vehicles – introduced de facto tariffs that more than halved the value of shipments from its neighbour in the seven months to July, from a year earlier.

Moreover, U.S. tariffs on Chinese goods, transshipments and other goods have yet to settle. BYD and its peers' journey abroad will start getting bumpier.

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CONTEXT NEWS

Chinese electric-car maker BYD will report its first-half earnings on August 29.

BYD sold 2.1 million cars in the first half of 2025, an increase of 33%, according to a sales report on July 1. Overseas sales accounted for roughly 464,266 units sold from January to June, per its monthly reports.

(Editing by Robyn Mak; Production by Ujjaini Dutta)

((For previous columns by the author, Reuters customers can click on HAMLIN/katrina.hamlin@thomsonreuters.com; Reuters Messaging: katrina.hamlin.thomsonreuters.com@reuters.net))