By American Ev
Getty ImagesWith companies like BYD and Geely surging ahead, American EV makers like Tesla are losing ground fast. Critics say if Washington continues to treat EVs as a cultural war issue rather than a strategic industry, the question may not be whether China wins but how much. (Representative Image)
As Chinese automakers widen their lead in the global electric vehicle market, President Donald Trump has threatened to strip federal subsidies from Elon Musk鈥檚 companies on Tuesday, July 1. Critics say it could further weaken the only US Carmaker capable of competing with China鈥檚 EV juggernauts. The threat follows the Senate’s passage of a bill cutting EV tax credits and battery manufacturing subsidies, key policies that supported Tesla and other domestic players.One in five cars sold is electric, and China is leading the electric vehicle race by a long margin. According to the International Energy Agency, companies like BYD, SAIC, and Geely produced 70 per cent of the electric vehicles sold globally in 2024. In stark contrast, US automakers accounted for just 5 per cent.Also Read: China鈥檚 first gaming GPU struggles to match 2012 graphics card, yet delivers a strong strategic messageOnly one American company, Tesla, still ranks among the world鈥檚 top 10 EV manufacturers. However, according to SNE Research, even Tesla, long hailed as the face of the global EV revolution, has been overtaken by China鈥檚 BYD and Geely.Live EventsChina鈥檚 advantage is structural and accelerating. The more EVs these companies produce, the more they benefit from economies of scale, allowing for cheaper production, rapid innovation, and faster market penetration.US falling behind as Chinese EVs go globalChinese automakers are aggressively expanding in Asia, Europe, Latin America, and even Mexico, where they will soon be within reach of US consumers crossing the border.In contrast, General Motors and Ford now earn the bulk of their profits only in the US. With lackluster sales elsewhere, analysts warn that these legacy brands could become irrelevant globally.”The United States needs to decide if it wants an auto industry that can compete globally,” said Greg Dotson, a University of Oregon law professor, to the NYT.Also Read: Kylie Jenner earns more from Instagram than boyfriend Timoth茅e Chalamet made from both Dune filmsWhile President Trump has vowed to revive American manufacturing, his administration鈥檚 rollback of Biden-era EV incentives may have the opposite effect.A budget bill passed by the Senate, backed by Trump, slashes $7,500 tax credits for EV buyers, funding for EV chargers, and subsidies for battery factories and lithium mining.According to Jay Turner of Wellesley College, more than $200 billion in US EV investment is now at risk. And that could be just the beginning.China鈥檚 battery blockade on the supply chainIt鈥檚 not just about electric cars; it’s about which fuels them. China controls more than half of global battery production and dominates the market for key materials like lithium and refined graphite.Also Read: They survived ice ages and hunted mammoths; so why did the Neanderthals suddenly disappear? Now a physicist blames something in the skyWhen AESC, a Chinese-owned battery maker, paused construction of a US plant in South Carolina, it raised alarms. The facility was supposed to supply BMW and other automakers with American-made batteries, essential for building a domestic supply chain.Without incentives or policy support, projects like this could dry up, making American automakers even more dependent on foreign suppliers.Politics over policies? Republicans argue that EV subsidies benefited the wealthy and that EVs still lag behind gasoline models in affordability and convenience. But the data from China suggests otherwise: Thanks to competition and scale, EVs are now often cheaper there than their gas-powered equivalents.However, pro-EV experts argue that, instead of putting America first, Trump鈥檚 chaotic anti-EV actions sabotage American workers, consumers, and manufacturers. The war on EVs is an attack on domestic industry and high-paying jobs.In North America, EV sales remain modest, growing just 3 per cent this year, while China and Europe saw 33 per cent and 27 per cent growth, respectively.US automakers know they can鈥檛 ignore this shift. GM鈥檚 Mary Barra and Ford鈥檚 Jim Farley have both reaffirmed their EV commitments, yet they鈥檙e scaling back production, citing demand uncertainty and financial caution.Ford, notably, has a team of former Tesla engineers trying to build EVs that can compete on cost and appeal with Chinese cars. But insiders say that those efforts may not go far without government backing.Also Read: Could China and North Korea join Iran in attacking the US? Secretary of Defense blames Biden鈥檚 policies for their closenessHow China is winning the EV raceFor now, 100 percent tariffs keep Chinese EVs out of the US. But that protection might be doing more harm than good. Critics warn that it’s shielding automakers from competition, and the tariffs could discourage innovation and delay much-needed upgrades.Meanwhile, American tourists and business travelers are already experiencing the sleek, affordable EVs offered by Chinese brands in places like Mexico, Thailand, Brazil, and the UK. Sooner or later, they鈥檒l ask why these cars aren鈥檛 available at home.(You can now subscribe to our Economic Times WhatsApp channel)
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