China's Xiaomi SU7 Max electric car.
A seismic shift is taking place inside the electric vehicle (EV) market. Chinese automakers have surged ahead to dominate the EV space, leaving U.S. manufacturers scrambling. Former Nissan executive Andy Palmer, often called the “Godfather of EVs,” recently told Business Insider that China is now the undisputed leader in this EV manufacturing - sending a warning to Tesla, GM, Volkswagen and other EV makers. With over 4.3 million people employed in the U.S. auto industry, leaders in government and business have a vested interest in protecting American ingenuity in manufacturing - not to mention American jobs. However, threats from China are sending a warning (with dual motors and regenerative brakes) that’s being heard all over the world.
The Numbers Behind China’s EV Ascendancy
China’s rise in the EV market is staggering. With over 200 brands offering electric cars, competition within China’s domestic market has driven innovation at a breakneck pace.
The Chinese government has poured billions into subsidies, research and development, and infrastructure to make the country the global hub for EV manufacturing. Last year, China’s BYD (short for “Build Your Dreams”) noted 2.4 million new car insurance registrations - making it the number one EV brand in China with an 11% market share. Backed by Warren Buffet’ Berkshire Hathaway, the company’s growth is explosive - considering the company started as a cell phone battery maker in the 90s, and launched it first fully-electric car in 2022. In contrast, Tesla produced 1.8 million cars in 2023 - second in worldwide EV production to (you guessed it) BYD.
Contemplating Chinese competitive threats.
The Chinese EV market has outpaced its Western rivals not just in scale but in the ever-increasing quality of its offerings. The best Chinese EVs can now travel 500 miles on a single charge and recharge to 80% in under 20 minutes—metrics that American automakers like General Motors and Ford can only dream of matching.
Performance Meets Value, in China
One of the most alarming aspects of China’s EV dominance is the combination of performance and affordability. Models like the BYD Seal and the Wuling Hongguang Mini EV have redefined what consumers can expect from electric vehicles. The Seal offers luxury-level features at a fraction of the cost of a Tesla Model 3, while the Hongguang Mini EV retails for less than $5,000—a price point that makes EV ownership accessible to the masses.
Business Insider reports that the Chinese startup Zeekr unveiled new batteries for its 007 sedan that are able to charge to 80% from 10% in a little over 10 minutes. The world’s largest EV battery supplier, China’s CATL, recently unveiled its Shenxing Plus battery. The company says it could provide over 370 miles of range after 10 minutes of charging.
Global Implications for China’s EVs
“The rise of Chinese automakers and new players has changed the car industry quite a lot,” said Honda CEO Toshihiro Mibe, citing technological trends of electrification at a Tokyo press conference. As Asian markets increasingly demand low-cost, high-performance vehicles, Chinese manufacturers are poised to expand aggressively. Chinese companies like BYD are making inroads into Europe and the Middle East, and expanding manufacturing to places like Mexico.
American automakers, by contrast, are facing headwinds. Supply chain constraints, higher labor costs, and limited government support have hampered their ability to compete. General Motors (GM) has the second-largest market share for U.S. EVs, at 9.4%, according to industry reports. The company plans to cut about 3,000 jobs in total this year, in pursuit of $2 billion in cost savings. Ford, with its flagship F-150 Lightning truck, has reduced its workforce by 4,000 in Europe.
Tesla Maintains 48% Market Share for U.S. EVs - What’s Happening in Germany and Japan?
Even as companies like Tesla and Rivian push forward with innovative products, they’re at risk of being overshadowed by the sheer scale and efficiency of Chinese rivals. For German automakers, challenges and cutbacks are prevalent - and Europe’s appetite for EVs has captured China’s attention. Noting that none of the top 10 selling EVs globally are made in Germany, BYD shipped its first order to Deutschland 10 months ago. A delivery of 3,000 electric vehicles landed in Bremehraven, and shipments have continued steadily since then.
Elswehere, Japanese automaker Nissan is cutting 9,000 jobs globally and 20% of its global production capacity. Perennial powerhouse Honda has reported a 15% drop in quarterly profits, due to threats from China. Honda and Nissan are currently in talks to create a merger between Japan’s second and third largest brands, in an effort to battle back against Chinese exports.
Lessons from China’s Industrial Strategy for EVs
The success of Chinese EVs is rooted in a well-coordinated strategy that other nations have struggled to replicate. As Inside EVs notes, China’s subsidies have created a robust ecosystem for EV development, from mining rare earth minerals to building charging stations nationwide. This end-to-end approach has slashed costs and boosted consumer adoption in country, and China has set its sights on expansion. So far, international sentiment towards Chinese trade practices has throttled back on Chinese exports. And U.S. tariffs are an effective protection for domestic production. But for how long?
In the U.S., efforts to promote EVs have been piecemeal at best. While EVs represent less than 10% of the U.S. auto market, they represent a much larger portion of the future of domestic auto manufacturing. Look for leadership strategies and coordinated efforts to emerge during the Trump administration, in support of the domestic EV auto industry (one of many reasons why Tesla CEO Elon Musk is staying close to the president-elect). Tariffs and protectionism are not as important - or sustainable - as innovation and strategy. Government and industrial leaders need a coordinated effort around EVs to protect and encourage new manufacturing, and new jobs.
