The US’s End To EV Support Will Significantly Strengthen China’s Aggressive Moves To Dominate EV Industry And Assure Their Eventual Ownership Of The Market By The 2030s

China’s aggressive move to EVs is increasingly moving Chinese EV makers ahead of the rest of the world particularly the US. The US is attempting to cripple this by blocking Chinese sales into the US and using Tariffs to make Chinese goods more expensive. This is likely to fail given the world’s trend to EVs and China’s economy, which rivals and may soon exceed that of the US. 

Part of how China got here is that the Chinese government aggressively supported their automotive market with financial help and by buying up control of critical EV materials like Rare Earth Minerals.

While the EV wave was primarily started by the US company Tesla, the CEO’s behavior has significantly weakened the Tesla brand, causing it to lag behind other firms it once led. China arguably now leads the world in EV Manufacturing, much like Japan once did.

The US and the rest of the world should be increasing their competitive efforts against China, but the US is pulling back from EVs, which will likely assure Chinese dominance in the future.

The Result Of Chinese EV Dominance

There are good and bad aspects to China's ownership of the automotive market. On the good side, while China produces oil, its government has resisted oil arguments that disparage EVs. As a result, they only view oil as a problem to be fixed, so they don’t internally have as much pushback from the petrochemical industry on EV adoption and sales. Thus, they have a far more aggressive and successful EV conversion strategy. If you believe Climate Change is real, which I do, then this should be better for the world than the ongoing attempts to keep using and polluting with gas-powered vehicles. This could mitigate the causes of climate change more quickly.

Another advantage is that China is heavily regulated, meaning cars that are more consistent, easier to service, and safer to drive over time across all of their brands. Different countries have very different standards which tends to result in far more difficulty than should be necessary in switching from one car brand to another, or from one country source for that car to another, you should end up with fewer differing standards, and far less use, service, and support difficulties.

However, the bad is pretty significant. First, countries that now have large automotive companies, like the US, will lose both that revenue and those jobs. The job loss alone would be catastrophic and include car dealers as well as car companies, as the trend with EVs is storefronts and ordering cars rather than buying them from dealers off lots. China, much of Europe, and Tesla use this model today.

EVs are also moving to autonomy, which makes them robots; Dell and others have highlighted robotics as the next critical large industry, likely more significant than the computer and automotive industries combined. China is already challenging for leadership in robotics; owning the EV market, which will become the automotive market by the mid-2030s, should ensure China also dominates robotics, and if they dominate both, the AI market isn’t that far behind, so the domino effect could be devastating to the rest of the world but particularly the US which is also competing for robotic and AI dominance and currently leads with AI. 

So, while the Chinese auto industry's dominance might benefit car owners, it would be devastating for any country with a large automotive industry like the US.

Wrapping Up:

Belief in Climate Change is great enough for governments to ensure EVs eventually become the dominant form of personal travel. China is positioned to dominate that future market and is already approximately 2 years ahead of most of the rest of the world (Tesla would be the exception, but even Tesla is falling behind companies like BYD and Huawei). 

If the US and other countries compete with China, their competitiveness will not significantly increase. In that case, China’s dominance is all but certain, which doesn’t bode well for automotive companies located in countries other than China.

Rob Enderle is a technology analyst at Torque News who covers automotive technology and battery development. You can learn more about Rob on Wikipedia and follow his articles on Forbes, X, and LinkedIn.