China’s Electric Vehicle Dominance Struggles in U.S. and Canada

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In 2025, one in four new global automotive vehicle sales are expected to be electric vehicles (EVs), either fully electric or plug-in hybrids. This marks a significant increase from five years earlier, when EV sales accounted for fewer than one in every 20 new cars sold.

However, in the U.S., EV adoption has lagged behind, with only about one in ten new vehicle sales being an EV as of 2024. In contrast, China, the world’s largest car market, saw more than half of all new vehicle sales be electric by that time.

According to reports from the International Energy Agency (IEA), two-thirds of fully electric cars produced in China are now cheaper to buy than their gasoline counterparts. Additionally, operating and maintenance costs for EVs are already lower than those for gas models, making them attractive purchases.

Most EVs sold in China are manufactured there by a variety of companies including NIO, Xpeng, Xiaomi, Zeekr, Geely, Chery, Great Wall Motor, Leapmotor, and BYD. These brands are increasingly well-known within China, and I expect they will soon become familiar worldwide as an expert on EVs for over 15 years.

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October 8, 2025

### What Kinds of EVs is China Producing?

China’s automakers produce a wide range of electric vehicles, from subcompact models like the BYD Seagull to full-size SUVs such as the Xpeng G9 and luxury cars like the Zeekr 009. Recent European crash-test evaluations have given top safety ratings to Chinese EVs, with many costing less than similar models made by other companies in other countries.

### What’s Behind Chinese EV Success?

Several factors contribute to China’s success in producing and selling EVs:
– **Low Labor Costs:** Relatively low labor costs play a role.
– **Generous Government Subsidies:** Generous government subsidies, as part of the Chinese strategy to propel advanced technologies like EVs on a global scale.
– **Innovative Use of Industrial Robotics:** Companies use robotics extensively, even building “dark factories” that can operate with minimal human intervention.

### Competition and Innovation

Chinese EV makers are fierce competitors, driving additional innovation. BYD, the largest seller of EVs both domestically and globally, employs over 100,000 scientists and engineers seeking continual improvement. From initial concept models to factory rollout, BYD takes just 18 months—half as long as U.S. and other global automakers.

BYD is also the world’s second-largest EV battery seller and has developed a new battery that can recharge in just five minutes, roughly the same time it takes to fill a gas-powered car’s tank.

### Exports

The real test of how well Chinese vehicles appeal to consumers will come from export sales. Despite currently exporting more cars than any other nation (primarily gasoline-fueled), China’s EV manufacturers are eager to sell abroad due to their ability to produce far more than the 25 million vehicles they can sell within China annually—perhaps twice as much.

The largest market where Chinese vehicles, whether gasoline or electric, are not being sold is North America. Both U.S. and Canadian governments have created what some call a “tariff fortress” by imposing 100% tariffs on imported Chinese EVs, doubling their cost to consumers. Additionally, the average price of a new EV in the U.S. is approximately $55,000, with less expensive vehicles making up part of this average.

If sold in America without tax credits (which the Trump administration is eliminating after September 2025), Chinese companies produce several sub-$25,000 EVs, including the Xpeng M03, BYD Dolphin, and MG4. However, these tariffs would remove the price advantage for such vehicles.

### Tesla, Ford, and General Motors

Tesla, Ford, and General Motors all claim they are working on inexpensive EVs. More expensive vehicles generate higher profits, and with the protection of the “tariff fortress,” their incentive to develop cheaper EVs is not as high as it might be.

In the 1970s and 1980s, there was significant U.S. opposition to importing Japanese vehicles. However, a combination of consumer sentiment and Japanese companies’ willingness to open factories in the U.S. eventually led to greater acceptance, with brands like Toyota, Honda, and Nissan common on North American roads.

The same process may play out for Chinese automakers, though it’s not clear how long that might take.