This week, the Nikkei news outlet reported that in the first quarter of 2023 China surpassed Japan to become the world’s top car exporter, according to data from the China Association of Automobile Manufacturers.

The news outlet reported that Chinese car exports in the period from January-March surged by 58% to 1.07 million units, compared to the same period in 2022.

Over the same period, Japan, the previous top exporter, sold 950,000 vehicles.

According to the data, China’s car exports grew due to the increasing demand for electric vehicles as well as increased Russian demand. New energy vehicles exports, which include EVs increased 93% year over year, reaching 380,000 units in the first quarter, making up roughly 40% of the overall car exports from China. The largest contributor to the new energy vehicle exports was Tesla’s China arm, which sold 90,000 units over the period. In the first quarter, Tesla’s exports from China rose 20% year over year.

China exported more than three times as many vehicles to Russia as it had a year earlier, shipping 140,000 units. That made Russia the top importer of Chinese vehicles.

After the beginning of Russia’s special military operation in Ukraine, Russia saw a number of global automakers pull out of the country as a result of Western sanctions jeopardizing supply chains and complicating financial transactions with Russian banks. Chinese automakers swiftly capitalized on the situation, moving into the void left behind by the exiting Western automakers.

In the second quarter, Chinese exports continued to increase. In the period from January to April of 2023, the nation’s car companies exported 1.37 million vehicles. Export volumes rose to 376,000 units last month, increasing 3.3% month over month, and 170% year over year.

In 2022, China was the second largest car exporter behind Japan, with an export volume of 3.11 million vehicles. This year, the China Passenger Car Association forecasts that China will export 4 million vehicles in 2023.