From marketplace Observer to planet Leader – Chinese Technology-Industry Offensive in EV Sector

Over the last decade, the People's Republic of China has emerged as a central force shaping the global marketplace for electrical vehicles. With a combination of factors specified as industrial policy, large scale investments and innovation, China has built a supply chain within specified vehicles, starting with natural materials and batteries, ending with complete vehicles and their distribution networks. It is besides the consequence of Beijing's efforts to build export competitiveness, focus on clean energy and strive for decarbonisation and independency from fossil fuel supply. Beijing's dominance is increasingly visible in global markets, and brands specified as BYD, Geely or large Wall are already recognisable and recognized in many places in the world. However, these efforts are not without difficulties, which consist only of competition, but besides a geopolitical situation.

The automotive manufacture is presently undergoing a transformation in which the improvement of electrical vehicles plays a key role. The global trend of decarbonisation and sustainable improvement has led governments and car manufacturers worldwide to reduce carbon dioxide emissions. According to the global Energy Agency, global sales of electrical vehicles have been increasing rapidly in fresh years, with around 17 million electrical vehicles sold in 2024, representing 20 % of the full cars sold[1]. Bloomberg fresh Energy Finance study indicates that sales of electrical vehicles will increase to 56 million by 2040, which is expected to account for around 58% of global sales of passenger cars[2]. In 2024 China produced 40% of electrical cars in the world. In 2024 these shares increased to 70%. Chinese electrical vehicle manufacturers invested a full of US$16 billion in abroad markets in 2024, exceeding US$15 billion in the country[3].

In 2024, a full of 17.3 million electrical cars were produced worldwide, about a 4th more than in 2023, mainly due to an increase in production in China, which reached a level of 12.4 million electrical cars. China remains the planet manufacturing center for electrical cars, accounting for over 70% of planet production in 2024. Production in China is increasingly influenced by the expansion of home producers[4].

China has become the planet leader in the marketplace for electrical vehicles and the Chinese home marketplace is the largest marketplace for specified products in the world. According to the Chinese car Manufacturers Association, around 12.866 million electrical vehicles were sold in China in 2024, an increase of 35% a year.[5]. China's dominance in this marketplace is partially due to a national strategy that prioritises the improvement of electrical vehicles. The Chinese government has implemented policy initiatives to support the production and acquisition of electrical vehicles, specified as taxation exemptions, subsidies and investments in charging infrastructure. Furthermore, abroad car manufacturers specified as Tesla were allowed to build factories in China. However, China's dominance in this sector is not limited to the home marketplace as the country has besides become the world's main exporter of electrical vehicles[6].

Although China remains a leader in the export context, it noted a noticeable slowdown in 2024. Although the marketplace continues to grow, the growth rate of exports is lower than in erstwhile years and only 7%. This slowdown was affected by respective factors. Firstly, the increase in trade restrictions resulting from the increase in duties on the main export markets prompted Chinese producers to accelerate exports before the entry into force of these duties. For example, in Brazil, although imports from China experienced a strong yearly increase of 120% in 2024, the second half of the year saw a sharp decrease of 8 times as a consequence of the return of duties. Europe remained the most crucial export marketplace for Chinese electrical cars, but the weakening of demand, the reluctance of European consumers to buy Chinese electrical vehicle brands and the fresh countervailing duties in the European Union resulted in a decrease in Europe's share of full Chinese electrical vehicle exports from over 70% in 2021 to around 40% in 2024. As a result, Chinese exports increasingly moved towards emerging markets specified as Mexico (an increase of 370%), South East Asia (an increase of 10%), as well as Russia and the Caspian region.

Main Chinese brands exporting electrical cars in 2024 and the number of exported vehicles:

• Chery: 1 144,000
• SAIC: 929,000
• Changan: 536,000
• Geely: 532,000
• Great Wall Motor: 453,000
• BYD: 433,000
• BAIC: 274,000
• Tesla China: 260 000
• JAC: 249 000
• Dongfeng: 246,000

As far as the home marketplace is concerned, in the first half of 2025 the Chinese marketplace for electrical vehicles continued to grow, with home brands taking a decisive advantage. In terms of growth rate, the leader is BYD, whose export growth in 2024 was 71.8% year-on-year. Changan was the next company to grow production by 49.6% year-on-year. The increase in JAC exports was 46.7%[7]. In the first half of 2024. Tesla ranked second on the Chinese marketplace for electrical vehicles, but this position was taken by Geely a year later[8]. The dominance of national brands is so clearly outlined.

In view of the overproduction caused, inter alia, by subsidies or low land prices, the Chinese manufacture focuses on exports as production importantly exceeds home demand. This leads to paradoxes specified as the conversion of fresh cars to ‘used’ – even though their counters do not indicate the course – and sending them abroad, or throwing them distant at the ‘cigarages’ of cars, resulting in waste of land and creating risks to the environment[9]. Another problem is that erstwhile Beijing considers the sector to be crucial, regional authorities focus on it without paying attention to marketplace needs, leading to overinvestment. There are regularly allegations of overcapacity by US officials[10] European[11]However, Chinese officials reject these accusations. Moreover, competition between electrical car manufacturers in the mediate State is exacerbating and appears to be unsustainable[12]. There are forecasts that by 2030 only 15 of the 129 brands of electrical and hybrid vehicles in China will be profitable[13]. He Xiaopeng, Xpeng's CEO, expects that by 2030 all car maker will gotta sale 3 million cars a year to last – and that only 8 companies will stay on the market[14]. However, most companies presently only sale a fraction of these volumes, while inactive expanding production. Faced with the situation on the home market, they turn to abroad markets to gain more global marketplace share. However, tariff changes in any countries make it hard for Chinese electrical cars to stay competitive.

Due to the overcapacity, fresh investments proceed to emerge, but not on the scale of the erstwhile years. In 2024, battery production capacity was twice as advanced as home request and 20% higher than global demand, resulting in a 90-percent decrease in fresh home investment compared to the policy-driven investment boom from 2021 to 2020. To escape price wars on the home market, Chinese electrical car manufacturers focus their attention on abroad investments. Investments in the electrical vehicle value chain increased from an yearly average of USD 8.5 billion between 2018 and 2021 to USD 30.4 billion between 2022 and 2024.[15]. In 2024, investments by Chinese companies in electrical vehicles were for the first time larger abroad than in the country, which represents a historical reorientation of capital – companies are looking for profitability outside the home market. The geographical structure of investments is besides changing – before 2024 Europe received 41% of announced Chinese investments in electrical vehicles. Since then, flows have moved to Asia and the MENA region, attracting 33% and 25% of fresh investments respectively. Private companies dominate China's global investments in electrical vehicles – they account for over 85% of the share. State-owned companies are besides active in investing, despite their smaller participation[16].

The largest investors in the field of electrical vehicles are CATL. From the beginning of 2014 to mid-2025, the company invested about 15 billion dollars, focusing on Europe, where 11.86 billion dollars were made during this period. CATL aims to guarantee access to high-quality technologies worldwide, contributing to the accomplishment of global sustainability objectives[17]. Another crucial investor is BYD – in Europe the company has already invested $5.14 billion, while in Asia it has invested $2.94 billion. 1 of the company's most key investments – the BYD passenger car mill in Hungary is presently under construction, but production is due to start this year[18]. This is the first specified mill of Chinese car maker in Europe[19]. besides crucial are Envision's investments, the value of which was $4.97 billion in the European marketplace between 2024 and 2025, while in North America it was $4.07 billion in the US.[20].

Table 1: List of largest announced transactions in the electrical car sector from 2023 to 2025

In fresh years China has announced many investments in the electromobility sector. The value of the 9 largest of these was 18.4 ml. The largest of the investments is the BYD task in Hungary worth 4.6 billion dollars[21]. Hungary has become a key direction of investment. Outside Europe, the mediate State besides invests in Indonesia, in the improvement of the battery chain of natural materials[22], and in Spain, where the built battery plant in Zaragoza is scheduled to be launched at the end of 2026[23].

Chinese abroad investment in the supply chain of electrical vehicles focused mainly on batteries, accounting for 69% of home investments. This share was even higher abroad, where batteries accounted for 74% of the full investment. 2 countries received the largest investments in electrical vehicles from Chinese companies: Hungary attracted $18 billion and Indonesia attracted $22 billion. 4 of the top 10 Chinese investments in Europe last year came to Hungary, and this country is on its way to become the second largest battery maker outside China.[24].

To keep the export pace, Chinese producers invest in expanding transport capacity through Ro-Ro ships intended for the carriage of cars. In 2025, BYD commissioned the construction of the world's largest ship of this type, so that its combined transport capacity would increase to over 30,000 cars[25]. Meanwhile, the leading Chinese transport company COSCO Shipping car Carriers announced plans to grow the fleet to operate up to 700,000 cars per year[26]. Despite the slowdown in exports in 2024, the increase in transport capacity creates conditions for Chinese producers to increase their exports again, playing a key function in facilitating transport from China and another production centres specified as South-East Asia.

In 2024, many regions introduced fresh duties on imports of Chinese electrical cars. The European Union imposed countervailing duties on Chinese imports of electrical cars to offset alleged production subsidies from electrical car manufacturers in China. Customs duties increased from the erstwhile 10% to 45% and have been in force since 31 October 2024. It is expected to apply for 5 years[27]. The duties imposed on Chinese electrical cars by the EU are seen as a way of encouraging Chinese companies to establish factories in Europe and protecting the European automotive manufacture alternatively than as a ban on imports of Chinese electrical vehicles. In the long term, the establishment of factories in Europe seems to be an inevitable trend.

As for electrical cars in Europe, China is actively building its position in the primary and middle-class car segment, simultaneously putting force on recognised brands specified as Volkswagen or Renault. While premium brands, specified as BMW and Mercedes, proceed to keep a strong position thanks to loyal customers, Chinese companies gradually gain the marketplace despite brand designation challenges, limited dealer network and after-sales service. Chinese electrical cars are increasingly attractive due to competitive prices, a advanced quality to price ratio, but besides advanced technology. Many of the conventional car manufacturers request to integrate parts from many suppliers, which increases costs. Chinese producers, specified as BYD, are presently able to offer cars with a price of little than 150,000 RMB (about $21,000) due to the fact that almost everything produces itself[28].

Meanwhile, the United States and Canada introduced in 2024 additional duties of 100% on all electrical vehicles produced in China[29], and in 2025, the United States announced further increases in customs duties on imports from China, effectively discouraging future imports of Chinese electrical cars. Mexico and Brazil, which besides saw a sharp increase in imports of Chinese electrical vehicles, besides approved tariff increases. In 2024, Mexico abolished a 15-20% work exemption on imports of electrical vehicles from non-free trade countries, including China. Brazil restored 10% of the import duties on electrical cars in 2024, planning to gradually increase them all 6 months until 35% in mid-2026.[30]. Unlike the fast increase in the importance of Chinese electricians in Europe and the mediate East, the impact on the US marketplace is little crucial – at this point it is little than 1% of the marketplace share. However, the entry of Chinese cars into the marketplace poses a serious threat to recognised players from North America, specified as Ford, GM and Tesla, especially as the Chinese frequently offer vehicles half the cost of their American counterparts. In addition, companies reorganise their supply chains to meet the request of 75% of regional components in the agreement between the United States, Mexico and Canada, which could further exacerbate competition[31].

In conclusion, China's improvement within electrical vehicles has created both opportunities and threats. On the 1 hand, electrical cars, offered at low prices, can influence the transition towards clean energy, but on the another hand, they uncover always more dependence on global markets. In creating a competition which, from the western point of view of the producers, is unsustainable, Chinese production of cars revealed concerns about the state of the manufacture in many countries, which is besides affected by the fact that producers from the mediate East receive subsidies. This creates discussions about unequal competition and imposes customs arfs. Despite the difficulties faced by Chinese companies, 1 thing is certain: the pace of improvement of this sector in China is most likely unstoppable and we can anticipate Chinese vehicles to proceed to grow in global markets.

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