EU and some other developed countries will implement Carbon Border Adjustment Mechanism (CBAM) upon the commodities imported from the developing countries. In order to distinguish the impacts of CBAM on Chinese automotive industry and to design the countermeasures, this paper comprehensively analyzes the related rules of EU CBAM, current status of Chinese automobile exports to Europe, domestic carbon pricing policies and carbon accounting mechanisms. It is found that, although there is little impact on Chinese automotive industry in the short term. However, in the long run, CBAM will cover the life cycle carbon footprint of the products, this policy has shown that it is urgent for China to gear its carbon governance institutions to the international conventions. To meet the challenges imposed via CBAM, the automotive enterprises should improve carbon accounting, management capacity and green supply chain management as well as explore internal carbon pricing if the conditions permit. The government should guide and help the enterprises to adapt to the stricter carbon rules of the developed countries, as the significant part of the exporters service system.