100 times in 4 years, the huge profits and traps of used car exports

From monthly sales of a few hundred units to 325,000 units in half a year, second-hand car exports have followed the steepest growth curve in the history of China's foreign trade. But when the growth rate hit the iron wall of supervision, the countdown to the era of profiteering had already returned to zero.

In 2019, the Ministry of Commerce launched a pilot export of used cars, with the annual export volume of only a little over 3000 units.

In 2021, we will barely climb to 15,000 vehicles.

In 2024, it will jump directly to 436,000 vehicles.

In the first half of 2026, this number has become 325,000 vehicles-in just half a year, it is close to the whole of 2023, with a year-on-year growth rate of 61%.

From annual export of 3000 units to annual export of 600,000 units (estimated in 2025), 100 times in 4 years.

The wealth story behind this curve is enough to write a business textbook. But textbooks usually only write about successes and not corpses. In today's article, I want to make up both halves.

1. How did the huge profits come about: three time differences

The huge profits from the export of used cars are essentially not earned by selling cars, but by arbitrage between three time differences.

The first one is the price difference.

Take the Russian market as an example. A domestic SUV with a domestic price of 120,000 yuan can be sold for US$25,000 at a Moscow terminal, equivalent to about 180,000 yuan. After deducting freight, customs duties, and customs clearance fees, the gross profit of a bicycle can reach 30,000 - 50,000 yuan. If it is a high-end new energy vehicle, the gross profit can even reach more than 80,000 yuan.

But this is just paper arithmetic. What really locks in profits is the second difference.

Second, the policies are poor.

China implements a value-added tax exemption policy for the export of used cars, and all value-added tax in the export chain is exempted. The import tariff structure of destination countries often imposes much lower taxes on used cars than on new cars.

This is the origin of zero-kilometer second-hand cars-a brand-new car that has just been rolled off the production line, and the customs declaration states that it is a second-hand car. It avoids the license threshold for new car exports and also avoids the entire vehicle tariffs in the target market. The price difference is between both ends.

Before 2025, this is a channel with almost zero compliance costs.

Third, poor information.

Overseas dealers and end buyers have almost no idea of the true condition, domestic purchase price, and freight composition of used cars in China. Early entrants can take advantage of this information asymmetry to double the CIF price to overseas customers.

These three differences add up to constitute a huge profit triangle for used car exports from 2020 to 2024. During that window period, driving 20 cars a month and earning a net profit of 1 million yuan was not a joke, but the real flow of many small and medium-sized exporters.

2. The table was lifted: three knives in 2026

But the huge profits are not digested by the market, but are cut away by policies.

First knife: zero-kilometer ban

In November 2025, the Ministry of Commerce and other four departments jointly issued the "Notice on Further Strengthening the Export Management of Used Vehicles". There is only one core clause: vehicles with an export registration date of less than 180 days must submit the "After-Sales Maintenance Service Confirmation Form", otherwise no export license will be issued.& nbsp; Effective January 1, 2026.

Second knife: Full compensation for Russian scrapping tax

Russia is China's largest single market for used car exports, accounting for more than 40% in 2024.

In October 2024, Russia will increase the new car scrapping tax rate by 70%-85% in one time. In 2025, Russia further stipulates that all vehicles that transit into Russia through Central Asia and other countries will be paid for in full at the time of customs clearance-that is, the tariff difference between Russia and the transit country will be made up.

The third knife: pure electricity export license

On January 1, 2026, the export of pure electric passenger vehicles will be officially included in license management. Only automobile manufacturing enterprises and their authorized operating enterprises can apply, and all pure electricity exports must obtain licenses before shipment.

After three cuts, the gross profit margin will drop directly from 15%-25% in 2023 to about 10% in 2026.

The era of huge profits has come to an end.

3. The trap is not just policy: there are four mines in the dark

If policies are the ceilings on the surface, then these below are the real reefs.

Lei Yi: Refurbishment of meter adjusting vehicles and accident vehicles

As mature as the meter adjustment industry chain in the domestic used car market is, how untrustworthy the cars going to sea are. A car with a surface display of 80,000 kilometers actually traveled 200,000 kilometers, and the engine conditions were close to major maintenance. After three months in the hands of overseas customers, they are stuck. The result is not a refund-but a direct loss of channel trust in the entire region.

Lei Er: Car lock is disconnected from OTA

After new energy vehicles went to sea, as soon as China's network was disconnected, the vehicles and vehicles were directly brick. Navigation cannot be used, voice assistant is on strike, and APP remote control fails. Some brands even lock their cars directly after the OTA upgrade-because they detected that the vehicle was overseas, triggering a security agreement.

This is not an exception, it is a common problem in the industry. The repair cost ranges from a few thousand per car to tens of thousands of brushing fees per car.

Lei San: Capital and goods rights are out of control

Under FOB terms, the rights to goods are transferred after the goods are loaded. However, in order to grab orders, many small and medium-sized exporters accept terms of payment at the port or even payment after sale. When the car arrives at a port in Africa, the buyer lowers the price on the grounds that the car's condition is inconsistent. You either accept the 30% bargain or ship the car back-the freight is higher than the residual value.

Lei Si: Gray customs clearance and qualification risks

Many of the huge profits in the 100-fold stories over the past four years are essentially tax evasion profits under gray customs clearance. Starting from 2026, China and major destination countries are tightening regulations on both exports and imports. A non-compliant order may trigger inspections on both sides at the same time-and you can't escape either side.

4. After the huge profits exit, what remains?

If you look at it without emotion, the number of 100 times in four years is abnormal in itself. A market with a three-digit annual growth rate must be dominated by policy arbitrage rather than driven by real supply and demand.

So the exit of huge profits is not a bad thing-it is the ticket for the industry to enter the regular military era.

So what's still there?

First, stock advantages.  China has 359 million cars, and more than 15 million used cars are replaced every year. The thickness of this supply side cannot be replicated by any country in the world. The cost advantage is not supported by tax evasion, but by economies of scale-this is the real moat.

Second, the differentiation of new energy sources.  The terminal price of used new energy vehicles from BYD, Geely and Great Wall in Southeast Asia and Latin America can be 60%-70% of that of Japanese fuel-fueled used vehicles, and the cost of using them is less than one-third. This is not a price war, it is an intergenerational crushing of product power.

Third, compliance dividends.  When gray players were eliminated by the policy, what remained were regular exporters who had truly established overseas after-sales, parts, and certification systems. Compliance is not a cost, it is a barrier-and this barrier is increasing every day.

5. Second half of 2026: Three survival rules

Rule 1: From selling cars to selling services.& nbsp; After-sales network, parts supply, and software adaptation are the paths for gross profit margin to be pulled back from 10% to 20%. A complete after-sales plan can make more money for one car.

Rule 2: Choosing a market is more important than choosing a car.  After the tide of tide in Russia, Southeast Asia (right-hand rudder new energy), Africa (fuel vehicles + high-chassis SUVs), and Latin America (plug-in + policy dividends) are three definite incremental markets.

Rule 3: Credit compound interest.  In a market with a 10% gross margin, the only leverage is trust. An overseas dealer is willing to pay a deposit without seeing the car, and he bears the highest risk. Credit repurchase

The era of huge profits is over.

But on a track that exports 600,000 vehicles a year and covers 160 countries, Zhener cars have just entered the real long-distance race.

Those who make 100 times more money in four years are not because they are smart-they are because they are lucky and are right in the center of the policy window.

Those who will continue to make money over the next 10 years will rely on compliance, credit and supply chain capabilities.

There is a high probability that these two groups of people are not the same.

Source: Xiong Yu, digital automobile export

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