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Electric vehicles

China's Electric Vehicle Lead Threatens US Auto Industry

Strategic Insights

— 2 min read

Chinese companies, led by BYD, SAIC, and Geely, are dominating the global electric vehicle market, producing 70 percent of all electric cars sold globally in 2024, while US automakers account for just 5 percent. The Chinese advantage in electric vehicle technology, batteries, and minerals needed to produce them could become insurmountable if US incentive programs are slashed. President Trump's policies aim to revive the US auto industry, but Republican attacks on electric vehicles might do the opposite by surrendering leadership in an emerging technology.

Key Takeaways:

  • Chinese companies have a significant lead in electric vehicle technology, producing 70 percent of the electric cars sold globally in 2024, while US automakers account for 5 percent.
  • The Chinese advantage in electric vehicle technology, batteries, and minerals needed to produce them could become insurmountable if US incentive programs are slashed.
  • Republican attacks on electric vehicles could surrender leadership in an emerging technology, threatening the US auto industry.
  • The US auto industry is losing ground globally, with one in five new cars sold worldwide being electric, and the percentage is increasing.
  • US automakers have steadily lost sales in Asia, Europe, and Latin America in recent years, as consumers prefer affordable electric and hybrid vehicles from Chinese companies.
  • The budget and policy bill passed by the Senate would slash Biden-era measures designed to give US automakers a fighting chance against Chinese competition.
  • The elimination of tax credits for electric vehicle buyers, fast charger subsidies, and battery factory subsidies would endanger over $200 billion invested in US electric vehicle manufacturing.
  • Some manufacturing projects have slowed, including AESC's battery factory in South Carolina, which will make it harder for electric vehicle makers to buy batteries made by American workers.
  • Only two Chinese companies, CATL and BYD, account for more than half of global battery production, and most battery materials like refined graphite and lithium come from China.
  • Republicans argue that Democratic efforts to subsidize electric vehicles mainly helped affluent car buyers, and that electric cars are inferior to gasoline models.
  • US electric vehicle sales have been modest compared to sales elsewhere, growing just 3 percent in the US this year, compared to 33 percent in China and 27 percent in Europe.
  • Automakers say they remain committed to electric vehicles, but have moderated production to avoid discounts offered by competitors.

Statistics:

  • One in five new cars sold worldwide is electric (International Energy Agency).
  • US electric vehicle sales grew 3 percent in the US this year, compared to 33 percent in China and 27 percent in Europe (Rho Motion).
  • Chinese companies produced 70 percent of the electric cars sold globally in 2024, while US automakers sold just 5 percent (International Energy Agency).
  • Over $200 billion has been invested in US electric vehicle manufacturing (Jay Turner, Wellesley College).
  • Just two Chinese companies, CATL and BYD, account for more than half of global battery production (International Energy Agency).

Sources:

  • International Energy Agency
  • Rho Motion
  • SNE Research
  • Jay Turner, Wellesley College
  • Qilai Shen for The New York Times
  • The New York Times (multiple articles and reports)

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