China has emerged as a global force in the electric vehicle (EV) market, surpassing Japan as the world’s top auto exporter and accounting for a significant portion of global EV sales. This rapid expansion has intensified the rivalry between the US and China, with concerns about Chinese oversupply and the competitiveness of Chinese brands.
The US aims to expand its own EV industry, but Chinese automakers have a significant advantage in terms of cost and access to critical materials. While pricing wars have reduced profit margins at home, Chinese automakers can charge more in overseas markets, incentivizing exports as domestic growth slows.
The US has implemented tariffs on Chinese EVs, but there are concerns that Chinese companies could circumvent these tariffs by building facilities in Mexico. The EU is also investigating Chinese government subsidies in the EV industry.
China’s EV success has been attributed to competitive pricing and technology, rather than government subsidies. However, the US has implemented incentives for domestic EV production, and both Democrats and Republicans have proposed increasing tariffs on Chinese EVs.
Despite the challenges, Western automakers will likely continue to rely on Chinese batteries for affordable EVs. China’s decades-long dominance in mineral procurement and technology development make it difficult for Western automakers to fully shut out Chinese suppliers.
